Report: Shareholders Urged To Reject CC Deal
March 29, 2007 at 5:01 PM (PT)
REUTERS reports that infuential investment adviser INSTITUTIONAL SHAREHOLDER SERVICES has urged CLEAR CHANNEL shareholders to vote against the $19 billion buyout of the company, saying the offer of $36.70 a share represents a "very modest premium" to CLEAR CHANNEL's worth.
"It appears that the primary strategic rationale for the proposed transaction is to take advantage of the hot financing markets driving the current private equity boom," ISS said. "We find that while this rationale may be reasonable, it's not necessarily compelling for longer-term shareholders."
ISS commended CLEAR CHANNEL for running a "shareholder friendly" auction, but said, "Just because a sale process appears to be well-run, it doesn't necessarily follow [that] the ultimate outcome of that process is the best alternative for shareholders."
The deal needs two-thirds of votes cast by shareholders to pass. CLEAR CHANNEL recently moved the vote from MARCH 21 to APRIL 19.