Westwood One, Inc. (WON) supplies radio and television stations with information services and programming. The company provides traffic reporting services and the nation’s largest radio network, producing and distributing national news, sports, talk, music and special event programs to its affiliate stations. The company’s main source of revenue is selling commercial airtime to advertisers through one of its two operating divisions: Metro/Shadow, which encompasses Metro Networks and Shadow Broadcast Services, and the Westwood One Network Division.

Last month the company closed the sale of $75M of a newly created series of preferred stock, 7.05% Series A convertible preferred stock, to Gores Radio Holdings, LLC, an entity managed by the Gores Group, LLC. The convertible preferred stock has an initial conversion price of $3.00 per share, which represents a 140% premium to the closing price of $1.25 for the company’s stock price as of June 18, 2008. In connection with this sale, the company issued to Gores four year warrants (in three substantially equal tranches) to purchase up to 10M shares of Westwood common stock, exercisable at $5.00, $6.00 and $7.00 a share, respectively.

The preferred stock sale follows a $25M investment in Westwood common stock by Gores in March 2008. Gores purchased 14,285, 714 shares of Westwood common stock at $1.75 per share, which closed in two equal tranches on March 3, 2008 and March 19, 2008 respectively. As part of the closing, the company increased the size of its board of directors to eleven in accordance with the terms of the purchase agreement, which specified that Gores designees be elected to the board.

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