Pot Sweetened For Clear Channel
Clear Channel Communications agreed April 18th to accept a sweetened bid by a private equity group that will take the vast media conglomerate private if approved by shareholders May 8th.
The equity group, led by Bain Capital Partners LLC and Thomas H. Lee Partners LP, was looking at an uphill battle for shareholders’ approval of a previous offer of $37.60 per share.
The revised, $19.3 billion offer came a day before shareholders were to take up a previously postponed vote on the lower bid. There had been rampant speculation that the vote was postponed because support was soft at best, and faced resistance from several large shareholders.
Fidelity Management & Research, Highfields Capital Management LP and the California Public Employees Retirement System were among those saying they would vote against the original offer. The opposing shareholders held a large enough stake that many believed the deal would fail at that price.
Despite the new offer, Clear Channel shares slipped 23 cents to $36.49 in afternoon trading on the New York Stock Exchange, signaling that some investors are betting the new offer isn’t enough to overcome shareholder objections.
The push for the higher price comes despite a radio industry facing strong competition from new music formats, like MP3 players.
The Clear Channel board – which shares several members with its spun-off progeny Live Nation – began shopping the company around last fall. It struggled to raise its stock price as the radio business fell out of favor with the public.
Few analysts believe the radio business will improve dramatically anytime soon, but some shareholders insisted the San Antonio-based company was worth more than the original equity offer because of its billboard business.
Clear Channel is selling nearly 450 radio stations in smaller markets and its television group, but even after those transactions are complete, Clear Channel will own 675 radio stations, most in the largest U.S. markets.