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Clear Channel secures an approval, closer to closing merger

Posted Feb 13th 2008 6:20PM by Jon Ogg (RSS feed)
Filed under: Sirius Satellite Radio (SIRI),

This near-lifelong private equity buyout of Clear Channel Communications (NYSE: CCU) may finally be coming to an end. Today the Department of justice issued a statement after the close of the market. This merger is being cleared with some conditions. Assuming this closes at the stated price of $39.20, this would be indicative of a 32% merger-arb gain. Not bad at all for a near-$20 Billion private equity deal at a time when it seems like all super-deals in private equity are dead.

Bain Capital and Thomas H. Lee can acquire the radio conglomerate if it divests radio stations in Houston, Las Vegas, Cincinnati, and San Francisco. This will prevent higher advertising prices in those markets. The Antitrust Division of the DOJ filed a suit today blocking the deal, but it filed a proposed settlement that would resolve competitive concerns.

This does allow any person to submit written comments during a 60-day comment period. Just in the last couple weeks the merger-arb spread was indicating that this deal was looking at-risk.

Now if we can just get these guys to approve the Sirius Satellite Radio (NASDAQ: SIRI) and XM Satellite Radio (NASDAQ: XMSR) merger. There was a boutique research report yesterday noting that a DOJ approval may be imminent.

Jon Ogg is a partner at 247WallSt.com.

Newspaper wrap-up 5-10-07: Murdoch began talks with DJ on March 29

Posted May 10th 2007 9:15AM by Eric Buscemi (RSS feed)
Filed under: Newspapers, Magazines, Internet, Daimler (DAI), News Corp'B' (NWS),

MAJOR PAPERS:
  • The Wall Street Journal (subscription required) reported that it was March 29, not the week of April 9 that News Corporation's (NYSE: NWS) Rupert Murdoch began talks with Dow Jones and Company Inc (NYSE: DJ), as securities regulators sort out the timing of events as insider trading allegations have surfaced in connection with News Corp.'s $5B offer for Dow Jones.
OTHER PAPERS:
WEBSITES:
  • Globe and Mail reported that Russian billionaire and automotive entrepreneur Oleg Deripaska's companies are going to buy 20 million shares of Canadian auto parts company Magna International Inc (NYSE: MGA) for $1.54B.

ISS throws cold water on Clear Channel deal

Posted May 2nd 2007 1:39PM by Tom Taulli (RSS feed)
Filed under: Private equity,

One thing is clear at Clear Channel Communications (NYSE: CCU) -- the company's $19.5 billion buyout is not looking good.

According to a Reuters story, the proxy advisory service ISS said that the deal is too cheap and that shareholders should reject it. The firm is highly influential in such matters and institutional investors often follow its recommendations.

The private equity buyers -- Bain Capital and Thomas H. Lee -- have upped their bid from $36.70 to $39. They also have said it was their "best and final" offer.

Well, in light of the ISS decision and vocal opposition from major shareholders like Fidelity, it look s like the company will not get shareholder approval. Because of Texas corporate law, Clear Channel needs to get a two-thirds majority. The shareholder meeting is on May 8th.

Then again, this may also be an indication that private equity firms are trying to show some restraint.

And, yes, it looks like the Street has already factored these things in. Clear Channel's stock is at $36 today.

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

More deal static for Clear Channel

Posted Apr 26th 2007 2:52PM by Tom Taulli (RSS feed)
Filed under: Apple Inc (AAPL), Private equity,

Today, Clear Channel Communications (NYSE: CCU) reported its Q1 results. Revenues increased from $1.49 billion to $1.61 billion, while net income rose from $96.8 million or $0.19 per share to $102.2 million, or $0.21 per share.

But the stock barely moved. Then again, Clear Channel is in the process of a leveraged buyout and the deal is looking iffy.

Recently, Clear Channel's private equity buyers -- Bain Capital Partners and Thomas H. Lee Partners -- upped their bid from $37.60 to $39. But it may not be enough to satisfy major investors like Fidelity Investments and Highfields Capital Management.

Looking at the five-year stock chart of Clear Channel is depressing. The stock price is off about a third. The largest radio operator can't seem to find growth opportunities, and then there are the threats from Internet radio, Apple (NASDAQ: AAPL) iPods, satellite radios, and other digital alternatives.

So if things are so bleak, why would Bain and Thomas H. Lee want to buy the company? Aren't these folks smart and have a history of posting strong returns?

I think the answer is fairly obvious. These investors see a value play.

Continue reading More deal static for Clear Channel

Clear Channel grabs $1.2 billion from private equity firm

Posted Apr 21st 2007 2:33PM by Tom Taulli (RSS feed)
Filed under: Private equity,

The $19.5 billion buyout of Clear Channel (NYSE: CCU) is still not very clear. Even when its buyers -- Thomas H. Lee and Bain Capital -- boosted the price to $39 from $37.50, some of Clear Channel's investors were not convinced.

But Clear Channel is not stopping. In fact, the firm is already paving the way for major changes.

This week, the firm sold its TV group for $1.2 billion to private equity firm Providence Equity Partners. The deal includes 56 stations.

There are also plans to sell off radio stations.

Basically, these actions are needed to pass muster with the antitrust authorities. Moreover, the cash will be helpful when debt is loaded on the balance sheet.

Yet, for Clear Channel to get its own buyout deal completed, it needs to secure a two-thirds vote from shareholders. That's a tough hurdle -- given the current stock price of $35.75, it looks like the mega deal probably won't happen.

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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S&P 500+4.981,110.63

Last updated: November 27, 2009: 06:46 AM

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