Report: Large Shareholders Resisting Clear Channel Deal
January 18, 2007 at 5:46 AM (PT)
Is the CLEAR CHANNEL sale encountering trouble? The WALL STREET JOURNAL reports in THURSDAY's editions that the company's largest shareholder, FIDELITY MANAGEMENT AND RESEARCH CO., is one of several large shareholders voicing displeasure with the terms of the deal that would take CLEAR CHANNEL private with backing from THOMAS H. LEE PARTNERS and BAIN CAPITAL PARTNERS.
The specific objections center around the valuation of CLEAR CHANNEL OUTDOOR HOLDINGS INC., in which CLEAR CHANNEL COMMUNICATIONS owns a 90% share.
The dissension poses a threat to the deal, since a two-thirds majority is required for shareholder approval of the transaction, but the JOURNAL also points out that the deal's exceptionally long closing time -- CLEAR CHANNEL has until the end of the year to close -- gives it considerable time to address the dissenters' objections. The story also quotes an anonymous person "close to the buyers" as characterizing the objections as "common" pressure tactics and predicting that "at the end of the day, FIDELITY will vote for" the deal.