Clear Channel Sold
Clear Channel Communications announced November 16th it will be acquired by a private equity group in a deal that offers $37.60 per share, or $18.7 billion, for the largest radio operator in the U.S. The winner will also assume about $8 billion in debt.
The winning bid came, surprisingly, from a group comprising Thomas H. Lee Partners and Bain Capital. The consortium had lost a third member, Texas Pacific Group, just prior to CCC’s deadline for bids.
A comparable bid had been expected to come from a competing group that included Providence Equity Partners, Kohlberg Kravis Roberts & Co. and Blackstone Group.
It was the Providence team that initiated talks of a buyout with CCC months ago, and the group was reportedly considered the frontrunner to buy the media giant and its 1,200-plus radio stations.
Thomas H. Lee and Bain Capital’s winning bid represents a premium of nearly 25 percent over CCC’s average closing share price of $29.99 during the month of October, CCC said in a statement. Some analysts had predicted the company could receive bids as high as $40 a share.
Clear Channel shares rose $1.33, or 3.9 percent to $35.45 on the NYSE during early trading November 16th.
CCC’s board of directors approved the deal and recommended that shareholders do the same. Interested parties, including chairman Lowry Mays, CEO Mark Mays and CFO Randall Mays, were recused from the vote. The family founded CCC years ago and sons Mark and Randall will continue to hold their positions in the company, while the chairman will still play an active role following the acquisition, the company said.
The Mays also own a 7 percent stake in CCC and stand to make more than $1 billion from the deal.
Pending shareholder and regulatory approvals and closing conditions, the deal will move forward. Because Thomas H. Lee was part of a consortium that bought Univision Communications in September, the deal could be subject to some scrutiny from media regulators, which would hold up the buyout.
In that case, CCC can solicit competing bids from third parties until December 7th, and negotiate with those parties until January 5th.
The company also announced it would sell off 448 of its radio stations located outside the top 100 markets, as well as its 42-station television group. Collectively, those properties made up less than 10 percent of CCC’s revenues last year, the company said. The closing of the merger is not conditional on the sale of those radio and television assets.