WSJ: For CC's Founding Mays Family, Less Is More
May 16, 2008 at 5:48 AM (PT)
For CLEAR CHANNEL COMMUNICATIONS INC.'s founding MAYS family, the radio company's revised privatization deal will result in a smaller payday on paper than the family would have received in previous iterations of the transaction. But analysts say the downsized deal still leaves the MAYS family better off than keeping their company public, writes THE WALL STREET JOURNAL.
At $36 a share instead of $39.20 a share, the MAYS family, who own 32 million shares -- about 6% of CLEAR CHANNEL's outstanding shares -- stands to lose about $104 million dollars on paper. They plan to roll over part of that stake into the private company in the form of so-called stub-equity ownership, an option open to all existing CLEAR CHANNEL shareholders. A total of $1.1 billion in the private company is available to shareholders who prefer the stub equity over cash; the MAYS family hopes to take up $100 million of that, according to people familiar with the situation.
By taking the company private, MARK and RANDALL MAYS have the opportunity to nurture their radio and outdoor-advertising company without the distraction of answering to analysts and shareholders. They also will benefit from fresh ideas coming from the new private-equity owners, BAIN CAPITAL LLC and THOMAS H. LEE PARTNERS LLC.
Those companies, which have sent teams to examine every aspect of CLEAR CHANNEL's business, have made a number of proposals to improve business operations, a person familiar with the matter says. They range from centralizing various operations to basing compensation for the radio sales force less on advertising minutes sold and more on the price for those minutes.
The MAYS brothers are likely to stay on in their current roles.
The future of other company executives is less certain. Many have already left for other positions.