Clear Channel shareholders to vote on September 25th


Shareholders of Clear Channel Communications will vote Tuesday, September 25th on whether to approve the long-pending deal to sell the company to a private equity buyout group led by Bain Capital partners and Thomas H. Lee Partners, along with the Mays family. The record date for shareholders eligible to vote has also been changed again – to next Monday, August 20th.

It was last November that Clear Channel announced that the Bain/Lee group had won the bidding battle after the company was put up for auction. But some large shareholders weren't happy with the original price of 37.60 per share and threatened to vote against the deal unless the bid was increased. Under Texas law, where CCU is incorporated, a buyout requires two-thirds shareholder approval, which was going to be a substantial hurdle if major shareholders planned to vote no. Eventually, the bid was upped to 39 bucks per share, but a final kicker was needed to win support from some of the reluctant shareholders. That kicker added another 20 cents, but also allows shareholders to convert shares in the current public company – up to 30.6 million shares – into shares of the new private company. While it would have been easy to change 39.00 to 39.20 in the proxy materials, the conversion option made things much more complicated. The legal language has all been worked out now, the proxies are ready to go and the vote is set for September 25th.

SmartMedia observation: Don't look for any late night nail-bitter as the votes are counted. As far as we can tell, there is no longer any organized resistance to the terms of the buyout. Highfields Capital, which had led the push for the stock swap option, has been buying more Clear Channel stock and appears to be hoping to capture the lion's share of that 30.6 million share stake available in the new company. As of a July 25th filing with the SEC, Highfields owned 31.8 million shares of Clear Channel.