The deal is done; Clear Channel begins a new chapter


The $24 billion buyout of Clear Channel Communications by an investor group led by Bain Capital and Thomas H. Lee Partners closed yesterday morning. Trading in CCU ended forever yesterday at the end of the NYSE trading day. However, some shares of the new owner, CC Media Holdings, will be in public hands and trade as CCMOV on the pink sheets. Since the offer to allow shareholders to convert old CCU shares into a maximum of 30% of the new CC Media Holdings was not fully subscribed, there had been some question about whether, when all of the money was tallied up at the closing table yesterday, Bain/TH Lee would force conversion of some additional shares to fill a gap. But that did not happen and the private equity group informed Clear Channel that CC Media would not be issuing any additional shares to CCU shareholders who had elected to take cash.

“Today is a great day for our loyal and patient shareholders and, importantly, puts our company in the financial and operational position to continue to lead beneficial change in both of our core businesses. We are deeply grateful to our loyal employees who have remained focused and generated terrific results through their hard work and dedication,” said Clear Channel Communications CEO Mark Mays, who will remain in that post under the new ownership.

What about the new owners?

“We are pleased to have closed the acquisition of Clear Channel in partnership with Bain Capital Partners, the Clear Channel management team and major public shareholders such as Highfields Capital Management and Abrams Capital. Clear Channel’s strong leadership position in the radio and outdoor advertising business provides advertisers with an unparalleled platform from which to cost effectively reach their target audiences locally and nationwide. We look forward to working with our management partners to continue building this great company,” said Scott Sperling, Co-President of Thomas H. Lee Partners, L.P.

“We are very happy to have completed the purchase of Clear Channel. We continue to be impressed with the company’s strong management team and its leadership position across its markets and media formats. We look forward to working with Thomas H. Lee Partners, Clear Channel management, and major public shareholders such as Highfields Capital Management and Abrams Capital to continue to strengthen Clear Channel’s competitive franchise and drive value over the long term,” was the comment from John Connaughton, a Managing Director at Bain Capital.

Employees received an email from Mark Mays assuring them that the future is bright:

"Good morning –
Today marks the beginning of a new future for Clear Channel – and for all of us at the company. Closing our merger with Bain and T.H. Lee (see attached release) launches the next phase of Clear Channel’s success. Rooted firmly in the hard work of all our people, this combination positions us for a very bright and successful tomorrow.
At a time of great change in the media industry, the opportunities that this merger presents for our company and for us as a team have never been more apparent.    
As we look to maximize those opportunities, our greatest strength, and a key differentiator, is our people.   The latest performance comparisons demonstrate how well you have been rising to the challenges of today’s marketplace – outpacing all our competition. Let me thank you all for staying so successful in the face of the economy’s headwinds, and for working successfully through the distractions involved in closing a major deal.  
Turning to the future, we’ve got great businesses, phenomenal operating leaders, and fantastic spirit throughout our ranks.  Now we’re adding smart, sophisticated investors to shepherd us through our next level of growth and success — people who understand and believe in our businesses.
This is a tremendous position to be in, and I hope you are as excited about it as we are.
We, of course, will continue to rely on your immense dedication, commitment to excellence, and a common focus on our goals.  Each of us must want to have a meaningful impact on the future growth of the company. With our interests fully aligned with those of our new partners, together we will invest in our future and deliver superior returns.
Thank you for all that you have already done for Clear Channel.  Taking the next step together is energizing and empowering for all of us, and we can do what is necessary to make our future the very best! 
Have a great day, and congratulations.


RBR/TVBR observation: Based on the recent monthly reports from RAB and the more recent numbers from Emmis and Cox Radio, this is the worst possible time to be getting into the radio business in a big way. But bad times are also times of opportunity, if you have the foresight and financial means to get through the worst of it and set yourself up to soar when the recovery comes. Let’s hope that CC Media Holdings is prepared to do that and assume its leadership position as the owner of what is by far the nation’s largest radio company. We wish them well, but that doesn’t mean we will hesitate to report on how the new company is operating, good or bad, in the future as we have in our past coverage of CCU.