Clear Channel buyout to close in Q1


Thomas H. Lee Partners dealmaker Scott Sperling was quoted as saying that the company has plenty of financing sources and expects to close the $26.7 billion buyout by March 31st. The FCC gave its formal approval to the license transfers last week and antitrust approval by DOJ is expected to come quickly.

Clear Channel’s stock has traded well below the $39.20 buyout price because of fears that Thomas H. Lee Partners and Bain Capital will be unable or unwilling to find financing for the buyout in the current marketplace and either walk away (which would carry a hefty penalty) or try to beat down the price. The stock price moved up, though, after the formal FCC approval and a Bloomberg reporter caught up with Sperling at the World Economic Forum in Davos, Switzerland. Sperling said his firm had every expectation that banks will finance the Clear Channel buyout and insisted that a lot of good financing sources are available. He said the current expectation is that the going private buyout will close by March 31st, the final day of Q1.

RBR observation: Despite all of the squeamishness in the market, neither Thomas H. Lee Partners, Bain Capital, nor Clear Channel itself ever took any actions to add credence to the fears that this deal would not close. Rather, they have moved steadily ahead with all of the actions required to complete the buyout as advertised. Shareholders have already approved the deal. The FCC has now approved the deal. The DOJ approval has been applied for – and that should be just a formality. It’s still all systems go and it appears likely that arbitrageurs who bought in on the market nervousness will get a nice return.