NY Post: Shareholder Outcry Caused CC Vote Delay
May 8, 2007 at 5:46 AM (PT)
THE NEW YORK POST reports the $28 billion leveraged buyout of CLEAR CHANNEL COMMUNICATIONS, which appeared dead in the water last week, has been revived after influential shareholders voiced their displeasure with the board's hasty rejection of a sweetened offer from BAIN CAPITAL and THOMAS H. LEE PARTNERS.
YESTERDAY, CLEAR CHANNEL's board pushed back a shareholder vote (NET NEWS 5/7) on the deal, scheduled for today, by two weeks while it considers the sweetened bid made last week by T.H. LEE and BAIN. The bid increases the cash offer by 20 cents a share to $39.20 and would give current CLEAR CHANNEL shareholders the chance to invest in the new private company.
CLEAR CHANNEL board members rejected the same offer last THURSDAY (NET NEWS 5/4), but were barraged with calls and letters from hedge funds and other shareholders over the weekend demanding they reconsider. The shareholder outcry, led by HIGHFIELDS CAPITAL MANAGEMENT, was significant and included large holders such as FARALLON CAPITAL, CHESAPEAKE CAPITAL, PERRY CAPITAL and AURELIUS CAPITAL, according to sources with knowledge of the discussions. Shareholders believe CLEAR CHANNEL's board will approve the offer in the coming days and schedule a new vote to take place in the next few months.
Mutual fund giant FIDELITY, which owns 10% of CLEAR CHANNEL and has been against the buyout from the beginning, appears to be reconsidering its stance, according to other shareholders. At issue is the so-called "stub equity," which allows a current shareholder to own part of the new private company alongside T.H. LEE and BAIN.