WSJ: Momentum Building For Clear Channel Sale
May 17, 2007 at 5:45 AM (PT)
Strong momentum was building last night for a final plan to clinch the $19.4 billion sale of CLEAR CHANNEL COMMUNICATIONS INC. to a duo of private-equity firms, reports THE WALL STREET JOURNAL.
Major shareholders HIGHFIELDS CAPITAL MANAGEMENT and FIDELITY INVESTMENTS were expected to be on board with a new buyout proposal brought forward last week. This proposal would sweeten the offer for the SAN ANTONIO media and entertainment company by 20 cents a share, to $39.20. The deal also offers current shareholders a chance to own as much as 30% of the newly constituted CLEAR CHANNEL, which would be majority-owned by BAIN CAPITAL and THOMAS H. LEE PARTNERS.
The shareholders' support for the plan clears the way for a deal that has endured months of contention among shareholders, the company's management and the private-equity firms, which had originally hoped to strike a deal at $37.60 per share late last year.
A newly amended agreement could be struck in the next few days, the report said, though final approval must still be struck among the private-equity firms and CLEAR CHANNEL's board. It is still possible the deal could fall apart at the final moment, especially given the contentious nature of the proceedings. And there is the issue of whether INSTITUTIONAL SHAREHOLDER SERVICES, which advises a number of big shareholders, would reverse its rejection of the transaction last on the table.
But the addition of HIGHFIELDS and FIDELITY gives a deal far greater chance of shareholder approval than previously thought.