Clear Channel Says Yes To A $26.7 Billion Deal
November 16, 2006 at 2:02 PM (PT)
The CLEAR CHANNEL BOARD has agreed to a bid of $26.7 billion by private equity firms THOMAS H. LEE PARTNERS and BAIN CAPITAL, including the assumption or repayment of approximately $8.0 billion of net debt. CLEAR CHANNEL will still be run on a day-to-day basis by Chairman LOWRY MAYS, CEO MARK MAYS, and President/CFO RANDALL MAYS.
The bid values CLEAR CHANNEL, which has about 1,150 radio stations, at $37.60 a share, representing a premium of approximately 25% over CLEAR CHANNEL’s average closing share price of $29.99 during the 30 trading days ended OCTOBER 24, 2006, the day before CLEAR CHANNEL first acknowledged that it was evaluating strategic alternatives.
CLEAR CHANNEL retains the right to solicit other offers until DECEMBER 7 and negotiate with other bidders until JANUARY 5, which leaves the door cracked open for further bids.
Radio Outside Of Top 100 Markets And TV Group To Be Sold
Additionally, CLEAR CHANNEL has announced plans to sell 448 of its 1,150 radio stations, all located outside the Top 100 ARBITRON markets -- 90 markets are affected -- as well as the company's 42-station TV group. Collectively, these properties contributed less than 10% of the company’s revenues last year.
For a list of markets in which the radio stations are being sold, please click here.
ALL ACCESS hears that a few of the markets may already be spoken for, with rumors swirling that MARATHON MEDIA has dibs on CC’s NORTH DAKOTA, MONTANA, WYOMING, and IDAHO (except BOISE) properties and WEST VIRGINIA RADIO CORP. is lined up to buy CC’s WEST VIRGINIA stations.
CLEAR CHANNEL CEO MARK MAYS said, "We are very pleased to announce this transaction which provides substantial value to our shareholders. We look forward to working with THOMAS H. LEE PARTNERS and BAIN CAPITAL PARTNERS to continue our business plan to provide exceptional programming to our audiences and value to our advertising partners."
Regarding the divestiture of radio and TV properties, MAYS added, "Our decision to divest these broadcast properties was reached as a result of the ongoing optimization of our diverse portfolio of media assets. These are profitable and well-managed properties in excellent markets. We believe that the sale of these stations will allow us to position our business to provide even greater value to our listeners and shareholders."
THOMAS H. LEE PARTNERS Co-Pres. SCOTT SPERLING stated, "CLEAR CHANNEL is one of the nation's truly great companies that has the finest collection of outdoor and radio assets in the industry. We are extremely pleased to be partnered with the management team led by MARK and RANDALL MAYS and to have the opportunity to work with them and to grow this company that was created by its Chairman and founder, L. LOWRY MAYS. CLEAR CHANNEL has tremendous long term growth opportunities in both the radio and outdoor businesses and we look forward to partnering with MARK and RANDALL to create value in the years ahead.”
BAIN CAPITAL Managing Dir. JOHN CONNAUGHTON added, "We are very impressed with CLEAR CHANNEL’s strong management team and the company’s leadership positions in a variety of markets and media formats. CLEAR CHANNEL is an exceptional media franchise that is well-positioned to grow thanks to the solid foundation the MAYS family has created. We look forward to partnering with CLEAR CHANNEL as it continues to innovate in meeting the changing needs of the audiences and advertisers it serves."
Following the announcement, there was a company-wide conference call. To see the Invester Q&A, just click here.