While Wall Street traders continue to worry about the private equity buyout of Clear Channel going to closing, the company and its buyers to be are pressing ahead. CCU has begun a cash tender and consent solicitation for nearly 1.4 billion in senior notes.
The tender offers in connection with its plan to be taken private by Bain Capital, Thomas H. Lee Partners and the Mays family are tentatively scheduled to close on January 14th. Clear Channel is offering to buy back 750 million of its Clear Channel Communications 7.65% senior notes due 2010 and 644.86 million of AMFM Operating Inc. 8% senior notes due 2008. The applicable spread for the CCU notes is currently estimated to be 350 basis points above par and 75 basis points for the AMFM notes, based on the value of US Treasuries with similar expiration dates. Holders who tender by the consent deadline, currently set for December 31st, will also receive a consent payment of 30 bucks for each 1,000 in face value.
RBR observation: Clear Channel’s stock rose more than 3% yesterday on this news. But despite all of the indications that the private equity players are preparing to fork over their cash and close on CCU, the stock is still well below the 39.20 buyout price. It seems unlikely that this deal will crater, but some on Wall Street are still nervous.