Report: CalPERS Voting No On Clear Channel Deal
April 17, 2007 at 5:45 AM (PT)
The $27 billion buyout of CLEAR CHANNEL COMMUNICATIONS remains in jeopardy after the CALIFORNIA Public Employees' Retirement System said yesterday it plans to vote against the deal.
THE NEW YORK POST reports that the move by the nation's largest public pension fund comes after the proposed buyers, including THOMAS H. LEE PARTNERS, BAIN CAPITAL and CLEAR CHANNEL's founding MAYS family, tried to increase their offer over the weekend to around $39 a share from $37.60. CLEAR CHANNEL's board and its advisers didn't think the increase was enough to get support from shareholders, so the increased bid was never formally made, according to sources close to the deal.
"It's now a game of chicken and will probably come down to the 11th hour," said one source.
If the buyers do not increase their offer, the deal is likely to be voted down, making for the largest leveraged buyout ever rejected by shareholders. CALPERS, which owns 3.3 million shares or less than 1% of CLEAR CHANNEL, said yesterday that the buyout was not in the best interest of shareholders.
The pension fund joins FIDELITY INVESTMENTS and HIGHFIELDS CAPITAL MANAGEMENT in opposing the buyout. The offer needs to be approved by two-thirds of shareholders at a special meeting on APRIL 19 in SAN ANTONIO.