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Clear Channel Spinoff Under Way

Clear Channel Communications filed a Form 10 with the Securities & Exchange Commission August 10th to formally spin off Clear Channel Entertainment into an independent company, CCE Spinco.

Details – such as the number of shares of CCC common stock the company would offer shareholders for CCE stock – were not available at press time.

The move coincides with Clear Channel Communications’ regulatory filing to raise up to $350 million in an initial public offering of stock for its billboard advertising subsidiary, Clear Channel Outdoor Holdings.

The temporarily renamed CCE Spinco will be organized into three business segments. Global Music comprises the promotion companies and music venues owned by CCC. Global Theater includes touring theatrical productions and its promotion. An “other” category includes the motorsports division and sports agency business.

Michael Rapino stands as president and CEO of Global Music. Clear Channel Communications President/CEO Mark Mays is a director in Spinco, as is chairman Lowry Mays. CCC’s executive VP and CFO, Randall Mays, is interim CEO and chairman of the board of directors. Additional directors are to be appointed prior to the distribution date.

Clear Channel COO Miles Wilkin is likewise COO of Spinco, and Clear Channel Entertainment CFO Kathy Willard has a similar position in Spinco.

The spinoff will qualify as a tax-free distribution for U.S. federal income tax purposes, and CCC intends to list Spinco’s common stock on the New York Stock Exchange. The ticker symbol is forthcoming.

According to Mark Mays, the company has decided to forgo a $3-per-share dividend (approximately $1.6 billion) to its shareholders following the close of the IPO and the spinoff. Instead, Clear Channel has decided to repurpose a portion of the funds into share repurchases.

“Spinco” is a moniker commonly adapted during these transactions, as are Newco, Topco, Mergeco and names to that effect.

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