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Clear Channel (CCU) first-quarter profit soars but misses estimates

Posted May 9th 2008 9:52AM by Eliza Popescu (RSS feed)
Filed under: Earnings reports, Deals, Marketing and advertising, , Economic data

Shares of radio broadcaster Clear Channel Communications Inc. (NYSE: CCU) were slightly up in early trading after the company posted higher first-quarter profit boosted in part by gains in its outdoor advertising unit. Though, the company was not able to beat analysts' predictions as the weak economy put pressure on the overall advertising market.

Clear Channel Communications announced that its quarterly profit surged to $799.7 million, or $1.61 per share. The income figures were definitely something to cheer about. During its first quarter last year, the company had net income of $102.2 million or 21 cents per share. Excluding one-time items, earnings for the quarter would have been $0.19 per share. Analysts' forecast (which typically exclude one-time items) was for $0.21 per share, according to Thomson Reuters.

The media and advertising display company also said that quarterly revenue rose 3.9% to $1.56 billion, compared with $1.51 billion reported in the same period a year ago, helped by favorable foreign exchange rates; excluding the effect of the week dollar, revenue rose only 1%. Analysts had been expecting to see slower sales of $1.53 billion.

Continue reading Clear Channel (CCU) first-quarter profit soars but misses estimates

Clear Channel deal - losing signal strength?

Posted Mar 19th 2008 6:35PM by Tom Taulli (RSS feed)
Filed under: Private equity,

Yet again, there are rumors surrounding the proposed $20 billion buyout deal for Clear Channel Communications Inc (NYSE: CCU). Even with the recent moves from the Fed, the credit crunch seems to be in full force. As a result, bankers are not holding back on negotiations.

So, on CNBC today, Scott M. Sperling gave an interview. He's the co-president of Thomas H. Lee Partners, which is one of the private equity sponsors of the Clear Channel transaction (the other partner is Bain Capital).

His take on the deal? Well, as should be no surprise, he had no comment on the status.

However, he is certainly nervous about the financial system. He talked about the problems with the default swap market and even commercial real estate.

Interestingly enough, he thinks the recession could last from 12 to 24 months. Although, he believes there will ultimately be some good deals for private equity operators.

Unfortunately, in today's trading, Clear Channel's stock was down nearly 9% to $32.60.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

Clear Channel buyout in trouble?

Posted Jan 8th 2008 2:58PM by Michael Rainey (RSS feed)
Filed under: Deals, Private equity,

In November of 2006, Thomas H. Lee Partners and Bain Capital announced that they were pursuing a deal for Clear Channel Communications (NYSE: CCU). It took a few months to reach an agreement, but in May 2007 buyout terms were reached, and shareholders approved the deal in September. The deal is worth nearly $20 billion, one of the largest buyouts in history.

As of noon today, Clear Channel is trading at $33.94, a significant discount to the buyout price of $39.20. This suggests that there is considerable -- and growing -- skepticism about the deal. Concerns include the weak track record of recent big buyouts as well as the uncertain prospects of commercial communications companies like Clear Channel, which face growing competition from internet-based services and MP3 devices.

The Financial Times, via MSN.com, is reporting that while bankers involved in the deal still think it will probably go through, there is some resistance. One banker is quoted as saying, "there are a lot of undercurrents, including the fact that the returns for the sponsors are terrible and the break-up fee isn't huge." The 'not huge' break-up fee is $500 million -- not a small amount for your average music lover, but small enough when compared to massive losses on a $20 billion deal.

Listen to this: Clear Channel (CCU) finally gets a buyout deal

Posted Sep 25th 2007 3:55PM by Tom Taulli (RSS feed)
Filed under: Private equity,

Time can be the enemy of buyout deals. It gives the parties more time to think about things -- or get frustrated. Just look at what happened with the Harman International Industries, Inc. (NYSE: HAR) implosion.

But, in the case of the buyout of Clear Channel (NYSE: CCU), the deal somehow appears to be mostly complete (the process took about 10 months). That is, today the company announced that its shareholders approved the transaction. As a result, the company's buyers -- Bain Capital Partners, LLC And Thomas H. Lee Partners, L.P. -- will become the new owners of the radio powerhouse.

In fact, during the buyout process, Clear Channel increased the price tag two times. There was also another interesting feature added along the way; that is, the shareholders have the right to roll over some of their equity into the private entity.

But, ultimately, the key takeaway is that radio has proven to be quite resilient. Despite competition from satellite providers and the Internet, the fact remains that traditional radio continues to be a big part of people's lives -- and more to the point, a nice cash-cow business.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

Hope for the Clear Channel deal?

Posted May 17th 2007 1:32PM by Tom Taulli (RSS feed)
Filed under: Private equity,

Just a couple weeks ago, it looked like the $26 billion buyout deal for Clear Channel Communications (NYSE: CCU) was dead.

But then again, doing such a deal is expensive and time-consuming. So why walk away? Maybe try to find a way to get things back on track?

Well, according to a piece in today's Wall Street Journal, the deal may actually get done.

Basically, the main opposition has come from two major shareholders: Fidelity Investments and Highfields Capital Management. They have a fiduciary responsibility to get the best value for their investors, right?

That means bidding things up. And it appears that Clear Channels buyers -- Bain Capital and Thomas H. Lee Partners -- will do just that. How much? The amount is about 20 cents to $39.20 per share.

There is something else: the existing shareholders will get a chance to participate in the private company, up to 30%. So perhaps when you blend things together, the ultimate value is higher than just 20 cents per share.

And with Clear Channel's stock at about $37.79, it does look like the Street is betting that there will indeed be a deal.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

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