An updated Q&A from the company tells Clear Channel shareholders the revised buyout is expected to close in Q3 and notes that all of the funds have been placed into escrow. Current shareholders won’t be getting any dividend payments while waiting for the deal to close, but they will be paid interest if closing takes place after November 1st.
The update to shareholders addresses the question that some may still have: Why did the CCU board agree to the revised transaction at $36 per share instead of fighting in court for the earlier $39.20 deal? “Our shareholders will avoid the significant delay and inherent risks associated with complex litigation,” the company said. It also noted that the $36 price is still a premium to where the stock had been trading and shareholders have the option of rolling over some of their current equity into the new company. The shares of CC Media will be registered with the SEC and trade over the counter, but will not be listed on any exchange.
Q: “Will I continue to receive quarterly dividends?”
A: “No, you will not continue to receive dividends between now and the close of the merger.”
Not only that, but the interest that was supposed to have begun accruing on January 1st has vanished. Under the reworked deal, shareholders will be paid interest at 4.5% per annum if the closing takes place after November 1, 2008. That interest rate will rise to 6% if the closing drags on beyond December 1, 2008.
Still ahead is a new vote by shareholders on the revised deal, since the yes vote for $39.20 has been voided by the price reduction. Clear Channel says a new proxy is being prepared for filing with the SEC and a special meeting for the shareholder vote will take place within 45 days after the proxy is mailed out.