Clear Channel approves increased buyout proposal

Clear Channel Communications said on Friday its board approved an increased buyout proposal of $39.20 a share, or $19.6 billion, which includes an option that allows current shareholders to take about a 30 percent stake in the restructured company.

The radio operator canceled a vote on the deal scheduled for May 22 and said it will set a new date after filing a new proxy statement.

The company had been under shareholder pressure to postpone the meeting in order to allow Bain Capital Partners and Thomas H. Lee Partners to raise their $19.5 billion bid by 20 cents a share to $39.20 a share.

Clear Channel originally rejected that $39.20 offer, arguing that its acceptance would delay the date of the meeting by up to 90 days, with no certainty the transaction would be approved by shareholders.

But shareholders pressured Clear Channel to reconsider its decision, with several stockholders previously telling Reuters they had called on the company's board to put the higher bid to a vote.

Shareholder support for the revised bid has been gathering momentum, a source familiar with the situation told Reuters on Thursday. Significant shareholders, including Fidelity and NWQ, have told Clear Channel that they are supportive of the revised proposal, the source added. Fidelity and NWQ were not available for comment yesterday.

Another significant shareholder, Highfields, is also supportive, sources previously told Reuters. Highfields and Fidelity had previously opposed a lower bid by the two buyout firms.

The deal faces a difficult hurdle because under Texas law, holders of at least two-thirds of a company's shares must approve the transaction. Shareholders who fail to vote are counted as voting against the deal.
Source : http://news.com.com