Largest investor expected to oppose buyout of Clear Channel

Clear Channel Communications Inc.’s biggest shareholder, Fidelity Management & Research, plans to vote against the proposed $18.7-billion private equity buyout of the radio giant, a person familiar with Fidelity’s position said Monday.

The person told the Associated Press that the mutual fund company, which owns nearly 11% of outstanding Clear Channel shares, will cast a vote against the deal at a shareholder meeting set for March 21. The person spoke on condition of anonymity because Fidelity hasn’t publicly commented on its position.

The offer of $37.60 in cash per share and the assumption of $8 billion in debt, made by an investment group led by Thomas H. Lee Partners and Bain Capital Partner, requires two-thirds of shareholders to approve the deal. Those shareholders who fail to vote will be counted as “no” votes.

The offer for the nation’s biggest radio station operator is considered by Fidelity to be “a significant discount to the true value of the company,” said the person familiar with Fidelity’s position.

Fidelity spokeswoman Jenny Engle declined to comment.

The cash offer by the investment group was a 10.2% premium over the closing stock price the day before it was announced Nov. 16. Spokesmen for Thomas H. Lee and Bain Capital declined to comment Monday on the shareholder vote.

Clear Channel spokeswoman Michele Clarke also declined to comment.

At the time the proposed sale was announced, Clear Channel owned or operated 1,150 radio stations, but it announced it would sell 448 stations, all located outside top 100 markets, and its 42-station television group.

The acquisition was not dependent on those sales, but the company has proceeded with divesting those stations.

Shares of Clear Channel fell 79 cents Monday to $36.31.