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Clear Channel buyout approved

From the Associated Press

san antonio -- It took just about three weeks for the nation’s biggest radio station operator, Clear Channel Communications Inc., to accept a buyout offer after announcing last fall that it was considering “strategic alternatives.”

It took 10 months longer for shareholders to OK the deal.

On Tuesday, they approved a $19.5-billion buyout offer from a private equity group led by Thomas H. Lee Partners and Bain Capital Partners.

The offer was first announced in November but was sweetened after some large shareholders signaled that they would oppose earlier offers.

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The latest offer was $39.20 a share in cash or stock in what would be a privately owned company. Current shareholders could end up with as much as 30% of the new company.

“We are pleased with the outcome of today’s vote,” Clear Channel Chief Executive Mark Mays said Tuesday. “We look forward to completing this transaction with T.H. Lee and Bain as quickly as possible.”

Of the shares voted, about 98% were in favor of the buyout of the San Antonio-based company in a preliminary tabulation, Clear Channel said. The company said more than 73% of the total shares outstanding and entitled to vote at the meeting were in favor of the deal.

Two-thirds of the shareholders had to approve the buyout, and those who didn’t vote were counted as voting against it. Previous offers of $37.60 and $39 a share were deemed too low by some and weren’t expected to pass.

The buyers will also assume $8 billion in debt.

“Given all the controversy and debate that surrounded this merger over the last six months, it’s perhaps a bit surprising” that so many were in favor, Stanford Group analyst Frederick Moran said. “But given the sweetener to the deal and the ongoing participation option, it all points in the direction of a positive completion to the Clear Channel privatization.”

Clear Channel, which also has an interest in the outdoor billboard business, has been divesting some of its broadcasting operation.

Its 56 television stations were sold in April, and sales deals have been reached on more than 350 of its radio stations. It plans to keep about 675 stations, mostly in larger metro areas.

The offer to allow shareholders to keep part of the newly private company is an unusual concession because private equity buyers pay a premium to get total control and fewer regulatory requirements than those required of public companies.

The deal is expected to close around the end of the year pending antitrust clearances and approval by the Federal Communications Commission.

Clear Channel shares rose 29 cents to $37.05.


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