Infinity’s IPO Pulls In $2.87 Billion

NEW YORK —  Infinity Broadcasting Corp., a CBS Corp. unit and the second-largest U.S. radio network, raised $2.87 billion in the third-largest IPO by a U.S. issuer this decade.

Infinity, whose stations carry the Howard Stern and Don Imus shows, sold 140 million shares--5 million shares more than expected--at $20.50 each, the midpoint of the $19-to-$22 range set by lead underwriter Merrill Lynch & Co. That was a 17% stake and gave the New York-based company a market capitalization of $17.22 billion, based on 840 million shares outstanding.

Infinity owns 161 radio stations in 34 markets. Its stations, which rank first or second in 28 of those markets, accounted for 11% of all radio advertising revenue in the U.S. last year. Infinity also owns TDI Worldwide Inc., one of the largest outdoor advertising companies in the U.S.

CBS, which also owns a television network, 14 television stations and several cable networks, retains 83% of Infinity. Proceeds of the sale will go primarily to pay $2.5 billion owed to CBS as a dividend.

Infinity’s closest competitors are Irving, Texas-based Chancellor Media Corp., which owns and operates about 465 radio stations in 105 markets, and San Antonio-based Clear Channel Communications Inc., which owns or programs about 184 radio stations.

The largest IPO this decade was by oil producer Conoco Inc., which raised $4.4 billion on Oct. 21. The second-largest was by Lucent Technologies Inc., which raised $3.03 billion on April 3, 1996. Fox Entertainment Group Inc. raised $2.81 billion on Nov. 10, the fourth-largest IPO.

Infinity will trade under the symbol INF on the New York Stock Exchange.

Shares of New York-based CBS fell 94 cents to close at $30 on the NYSE.