Clear Channel Communications agreed to Bain Capital and Thomas H. Lee's new bid of $39 per share ($19.35 billion), up from $37.60 previously. However, media reports are citing sources familiar with the matter who say Fidelity and Highlands Capital Management, two of Clear Channel's largest shareholders with a combined 15% stake, will reject the deal and hold out for a higher bid. A shareholder vote scheduled for today has been postponed until May 8. Analysts say a bid greater than $40/share would appease dissident shareholders. A Stanford Financial Group analyst comments, "What's most interesting to me is that the equity partners upped the offer just enough to entice shareholders but not enough to lock in their support." The deal includes assumption of $7.7b in debt. Shares of Clear Channel fell 1.3% to $36.23 yesterday, trading as high as $37.99 intra-day, and trading up .33% in the after-hours to $36.35 on volume just short of 600,000.
Sources: Press release, Associated Press, Bloomberg
Commentary: Private Equity Pair Raises Clear Channel Bid to $39 a Share -- NYT • Clear Channel Communications: Get Up, Stand Up - Shareholders Fight Back • Google and Clear Channel Set to Announce Advertising Deal
Stocks/ETFs to watch: Clear Channel Communications Inc. (CCU). Competitors: XM Satellite Radio Holdings Inc. (XMSR), Sirius Satellite Radio Inc. (SIRI), Citadel Broadcasting Corp. (CDL), Cumulus Media Inc. (CMLS). ETFs: PowerShares Dynamic Media Portfolio ETF (PBS), PowerShares Dynamic Leisure & Entertainment (PEJ)
Conference call transcripts: Clear Channel Q3'06
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