Report: Fidelity And Others Against Clear Channel Sale
March 7, 2007 at 5:43 AM (PT)
ANDREW ROSS SORKIN writes in today's NEW YORK TIMES that some CLEAR CHANNEL shareholders are planning on voting against the company’s pending $18.7 billion sale to two private equity firms, THOMAS H. LEE PARTNERS and BAIN CAPITAL, because they feel the price is too low.
The buyout of CLEAR CHANNEL has become a test of wills between some of the nation’s largest investors -- like mutual fund giant FIDELITY INVESTMENTS, which plans to vote against the deal, contending it severely undervalues their shares -- and the private equity firms. The firms refuse to raise their bid and have threatened to walk away from the deal if it is voted down.
We canâ??t make the numbers work. The reality is weâ??re getting very nervous about the radio market.
The deal, which was struck in NOVEMBER, will be voted on in less than three weeks. The sale requires approval from two-thirds of the shares outstanding. If current shareholder sentiment holds and a higher offer does not emerge, the deal will almost certainly be dead.
"We wish we could raise our bid, but it doesn’t make sense," said a person involved with the bidding group who was not authorized to comment. "We can’t make the numbers work. The reality is we’re getting very nervous about the radio market."