The shareholder vote on a $19.5 billion buyout of Clear Channel Communications Inc. will be voted on Tuesday, September 25, as a shareholder meeting takes place in San Antonio, the home of the radio giant.
The original offer was made by a private equity group led by Thomas H. Lee Partners LP and Bain Capital Partners LLC in November 2006, but has been increased several times since then as major shareholders rejected them as not high enough.
Most of the larger shareholders holding out have now responded positively to the current $39.20 per share offer on the table. The buyers would also assume $8 billion in debt.
Thinking this offer will be enough, Stanford Group analyst Frederick Moran said, "It appears that all the stars have aligned. We also think that the credit crunch and the shaky stock market environment over the summer causes more comfort on behalf of shareholders to approve the deal."
The added incentive to allow existing sharholders an ownership in the company is unusual, as private equity firms pay the usual premium for the very purpose of getting rid of those types of headaches. To pay the premium and allow existing shareholders a piece of the company shows how badly the group wanted Clear Channel.
Shareholders could end up owning as high as 30 percent of the company.
Those wanting to keep shares in the newly created company should be able to trade them over-the-counter, but not on major exchanges.
Shareholders must have owned the stock as of August 20 to partake in the vote.
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