Clear Channel accepts buyout offer
Clear Channel Communications Inc. agreed today to a Boston-based private equity group's $19.35 billion offer -- an almost 4 percent increase from the group's previous bid, which had met with strong shareholder opposition.
The offer of $39 per share plus the assumption of $8 billion in debt raises the price for the billboard and radio company by about $690 million. It came the day before a scheduled vote on the lower offer.
The new offer now faces a shareholder vote on May 8.
Some of the company's largest shareholders -- including two Boston-based investment firms, Fidelity Management & Research and Highfields Capital Management LP -- said they would vote against the original offer of $37.60 per share. The opposing shareholders held a large enough stake that many believed the deal would fail at that price.
The equity group is led by two private equity firms, Bain Capital Partners LLC and Thomas H. Lee Partners LP, both of Boston. They have insisted for months that the initial offer was the best they would make.
Despite the new offer, Clear Channel shares slipped 23 cents to $36.49 in afternoon trading, signaling that some investors are betting the new offer isn't enough.
The push for the higher price comes despite a radio industry facing strong competition from new music formats, such as MP3 players.
The Clear Channel board 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.
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 US markets.
(AP)
