Clear Sailing For Clear Channel Buyout

After 10 Months, Shareholders Approve $19.5B Deal With Private Equity Group

(CBS/AP)  Clear Channel Communications Inc. shareholders approved a $19.5 billion buyout of the radio giant Tuesday, more than 10 months after the deal was first announced.

Of the shares voted, about 98 percent were in favor of the buyout of the San Antonio-based company, Clear Channel said.

The offer from a private equity group led by Thomas H. Lee Partners LP and Bain Capital Partners LLC was first announced in November but was sweetened several times after some large shareholders signaled they would oppose earlier offers.

The latest offer of $39.20 per share in cash or stock appeased at least some of the big holdouts against what could become a privately owned company. Current shareholders could end up with as much as 30 percent of the new company.

Those who choose to keep shares in the new company will be issued shares that are expected to trade over-the-counter and will not be listed on any major exchange, according to company filings last month with the Securities and Exchange Commission.

The buyers will assume $8 billion in debt.

Two-thirds of shareholders were needed to approve the buyout, and previous offers of $37.60 and $39 per share were deemed too low by some and weren't expected to pass. Analysts have said the latest offer will likely be enough to win over the holdouts.

"It appears that all the stars have aligned," Stanford Group analyst Frederick Moran said. "We also think that the credit crunch and the shaky stock market environment over the summer causes more comfort on behalf of shareholders to approve the deal."

The offer to allow shareholders to keep part of the newly private company is an unusual concession because private equity buyers pay a premium to get total control and fewer regulatory requirements than those required of public companies.

The deal is expected to close before the end of the year.

Among Clear Channel's biggest shareholders are Fidelity Management & Research, Highfields Capital Management LP and the California Public Employees Retirement System.

According to its Web site, the company was founded in 1972 by Lowry Mays and Red McCombs as San Antonio Broadcasting Company. It acquired its first "clear channel" radio station - a station that has exclusive use of a frequency - in 1975, when it purchased WOAI in San Antonio, and entered television with the purchased of a station in 1988. It also has outdoor advertising.

With powerhouse AM and FM radio stations, Clear Channel has some influence on national radio programming. In April 2004, the FCC fined Clear Channel $475,000 for indecency in the Howard Stern show (which was syndicated by a company then co-owned with CBS. As a result, Clear Channel dropped Stern from its six stations that broadcast his show, including San Diego and Pittsburgh. Stern then began to explore leaving federally-regulated broadcasting for satellite radio, and inked a deal with Sirius Satellite Radio.

The FCC that year also fined Clear Channel $755,000 for comments made by a Tampa, Fla., radio personality known as “Bubba the Love Sponge.”

Earlier this year, a Clear Channel-owned Tampa radio station put up three billboards in the Tampa area featuring the paparazzi photos of Spears with a freshly shaved head and an angry sneer on her face. The ads also had pictures host Todd Schnitt along with the slogan s "Total Nut Jobs," "Shock Therapy" and "Certifiable." The billboards were removed after Spears threatened to sue.

Some Clear Channel stations are affiliates of the CBS Television Network and the CBS Radio Network, which, like CBSNews.com, are part of CBS, Inc.. CBS also produces outdoor advertising.

[getloud1]

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[dan9111]

Boldwin223, so why debate? If coercion and violence is the proper tool, then you should be fighting Clear Channel directly with weapons you paid for. You are not advocating freedom, but threatening me to pay for your crusade. If I am free to disagree with your plan, then so is Clear Channel. The truth is inescapable.

[boldwin223]

Republicans are pro business and corporations try to make sure that Republicans stay in power. This is just another example of the Bush administration looking the other way while the consumer gets screwed. This is a first step to take Clear Channel private where there is very little FCC oversight.

[dan9111]

Razzl, I could not disagree more. We will always get more FCC nonsense from the wild-eyed left. We have a war-criminal president and this is where you guys make your stand? Wanting all of it to go to NPR, who oh yeah, steals our money to endorse murder around the globe! Sick and twisted.

The only reason CBS et.al. exist is because they play by the FCC''s rules. It is not freedom at all. And the remedy our beloved left-wingers come up with -- more regulation. Got to love it. I had thought back in the 1970''s that the liberals would wake up from their fantasy of "good government". Apparently not. We are doomed to have Rush Limbaugh 24/7 on every channel oh by about 2015. Really sad.

[antoniof123]

razzl I agree with you 100 percent. Of course there day is coming and the storm is already approaching they just refuse to see it.

[Razzl]

It''s a deadpan understatement to say that Clear Channel "has some influence on national radio programming"; This Republican outfit has bought up every radio station in sight and pretty much obliterated the "top 40" music format from the airwaves, milking profit by turning all its stations into some kind of "oldies" format. We have today the first generation of teenagers who can''t listen to new music produced for them. Clear Channel has also inserted right-wing hate talk shows into as many markets as possible. The great disaster which this monopolistic company has been for national culture and political discourse convinces me that the FCC should not be selling airwave rights to any entities that are not publicly-traded companies or registered nonprofits--at least that way they have to report on who calls the shots and the public has some leverage for intervention to prevent this kind of usurpation of public property in the future...