Friday, May 18, 2007

Clear Channel Deal Is Sweetened (WSJ)


Clear Channel Communications Inc. entered a sweetened deal to be acquired by Thomas H. Lee Partners LP and Bain Capital Partners LLC.

The San Antonio media-and-entertainment company said Friday the new price of $39.20 is 20 cents more than the previous offer. Shareholders will receive an "additional per share consideration" if the deal closes after Dec. 31, the company said. Its shares traded at $37.79 in 4 p.m. composite trading on the New York Stock Exchange on Thursday.

The new agreement also includes provisions limiting the fees payable to the private-equity group in the transaction, and requires the board of the new corporation always include at least two independent directors.

Current stockholders can now either receive the cash consideration or shares in the new corporation to be formed by the acquisition on a one-for-one basis. 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.

Clear Channel's board has unanimously approved the amended agreement.

Earlier this week The Wall Street Journal reported Clear Channel's major shareholders, Highfields Capital Management and Fidelity Investments, were expected to be on board with the new buyout proposal, which was brought forward last week.

The takeover plan 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. The prior offer, totaling about $18.65 billion, probably would have been shot down.

The addition of Highfields and Fidelity would give the deal far greater chance of shareholder approval than previously thought. The company twice delayed its privatization vote, first in an effort to rally support for the privatization at $37.60, and then to give shareholders time to consider the improved bid of $39.

Clear Channel said the special meeting of shareholders scheduled for May 22 won't be held and the company will set a new meeting and record date.

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