Report: CC LBO Would Give Mays Family Big Payoff
October 30, 2006 at 6:01 AM (PT)
Should they stay or should they go? The WALL STREET JOURNAL's MONDAY editions analyze the effect of a CLEAR CHANNEL leveraged buyout on the MAYS family and figures that the family would get over $1.1 billion plus $80 million or more in severance if the winning bidder asks the MAYS men to leave the company, but could make more if they stay.
Chairman LOWRY MAYS owns 29 million shares valued at over $1 billion at FRIDAY's closing price, plus options for 3 million more shares. CEO MARK MAYS has about 1.6 million shares ($56 million) plus options for another half-million shares, while his brother RANDALL, the CFO, owns 1.2 million shares ($42 million) and options for another half-million shares. Each would get seven times their base salary plus seven times their best annual performance bonus of the past three years in severance, plus cash to pay for tax costs, and stock options.
However, two of the groups likely to bid for the company would want the MAYS family to stay on board and may offer incentives to keep at least MARK and RANDALL MAYS with the company, a situation that may raise questions among other bidders if they perceive that the incentives give the family a reason to steer the company into the hands of one of the groups offering them incentives.
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