The Clear Channel Bidding War: $17 Billion and Beyond

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Clear Channel May Get Rival Buyout Offers Exceeding $17 Billion [Bloomberg]

Summary: Clear Channel is expected to be sold for around $17 billion as leveraged buyout groups compete for ownership of the nation's largest radio broadcaster which controls 1, 150 stations. Sources say that Providence Equity Partners, Blackstone and KKR are bidding against a rival group consisting of Bain Capital, Thomas H. Lee Partners and Texas Pacific Group. The Board put CCU on sale after buyback strategies and asset sales did not raise the stock price; its market value declined 60% since 2000 as firms increasingly purchase advertising on the internet and satellite. "Clear Channel has made the necessary adjustments to succeed long term,'' said Stanford Group analyst, Fred Moran who put a "hold" rating on the company. Sources predict that Blackstone has the winning bid because it approached CCU first, but some speculate that Apollo Management LP, Carlyle Group, Cerberus Capital Management LP and Oak Hill Capital Partners might join the bidding contest.
Related links: Additional coverage: Reuters. Commentary: In Clear Channel Buyout Talks, Billboards Loom Large • Google Rumors: Radio M&A, Free Checkout • Clear Channel Shows Mixed Q3 Results Ahead of Possible Sale. Earnings conference call: Clear Channel Q32006
Potentially impacted stocks and ETFs: Clear Channel (CCU), PowerShares Dynamic Media (PBS) • Competitors: Cox Radio (CXR), Citadel Broadcasting Corp. (CDL), Cumulus Media Inc. (CMLS)

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