Highfields now backs Clear Channel deal

Clear Channel Communications Inc. shareholder Highfields Capital Management LP said today that it has reached a voting agreement with Bain Capital Partners LLC and Thomas H. Lee Partners LP in support of the private investor group's pending acquisition of the radio and outdoor advertising conglomerate.

Under the terms of the agreement, Highfields -- the company's third-largest shareholder -- will vote all of its Clear Channel shares in favor of the acquisition.

Clear Channel's board approved the $19.45 billion deal once the private equity partners agreed to allow shareholders to own shares in the new company with the same benefits as the equity firms. Shareholders will have the option to accept cash or shares in the new entity.

In return for Highfields' support, the private equity group agreed to assure the new entity's public shareholders equal treatment in all dividends and other distributions, as well as representation by at least two members of the board.

According to the related regulatory filing with the Securities and Exchange Commission, the agreement gives Highfields the right to select one of the directors representing the public shareholders.

The private equity group also agreed that affiliate transactions between Clear Channel and the private equity group will generally be prohibited unless approved by the public shareholders or the independent directors who will represent them.

Highfields reported beneficial ownership of 24.9 million shares, representing a 5 percent stake in the San Antonio company. (AP)