Dow-17.24down-0.17%
10,433.71
Nasdaqunch0.00%
2,169.18
S&Punch0.00%
1,105.65
guitar © Corbis

Extra11/16/2006 11:22 AM ET

Clear Channel accepts buyout offer

The nation's biggest radio station owner agrees to be taken private for about $18.7 billion.

By The Associated Press

Clear Channel Communications, the nation's biggest radio station owner, agreed today to be acquired by an investment group for about $18.7 billion.

Clear Channel (CCU, news, msgs) owns or operates 1,150 radio stations and is the largest operator of radio stations in the country.

It also owns a majority of Clear Channel Outdoor, the outdoor-advertising segment that sells billboard and bus-stop ads.

The transaction would be one of the biggest deals in which a company has been taken private, and showcases the vast sums that buyout groups have recently been able to assemble to acquire public companies.

Clear Channel said the deal calls for a group led by the investment firms Thomas H. Lee Partners and Bain Capital Partners to pay $37.60 in cash for each share of Clear Channel common stock. That is a 10.2% premium over its closing price on Wednesday.

The buyers are also assuming about $8 billion in debt in the deal.

Clear Channel shares climbed nearly 4% in midmorning trading in New York.

Clear Channel announced in late October that its board of directors was evaluating "strategic alternatives to enhance shareholder value."

Analysts had said taking the company private could push shares toward a price of $37 to $40 each.

Clear Channel said the company's board of directors, "with the interested directors recused," unanimously approved the agreement and is recommending shareholder approval.

Lowry Mays is the company's chairman of the board and his two sons, Mark and Randall, are CEO and chief financial officer, respectively.

People familiar with the matter had expected at least two bids to be submitted as the deadline for offers passed earlier this week. Another bid had been expected from Providence Equity Partners, the Blackstone Group and Kohlberg Kravis Roberts.

In a separate announcement today, Clear Channel said it plans to sell 448 of its radio stations, all located outside the top 100 media markets in the United States, and its 42-station television group.

The deal would rank behind KKR's 1988 buyout of RJR Nabisco, which still is the biggest going-private deal ever at $25.1 billion. It would also trail two other deals announced earlier this year. Those included the $21.8 billion buyout of airport development company BAA and the $21.2 billion buyout of hospital company HCA.

Rate this Article

Click on one of the stars below to rate this article from 1 (lowest) to 5 (highest). LowRate it 1Rate it 2Rate it 3Rate it 4Rate it 5High
Fund data provided by Morningstar, Inc. © 2009. All rights reserved.
StockScouter data provided by Gradient Analytics, Inc.
Quotes supplied by Interactive Data.
MSN Money's editorial goal is to provide a forum for personal finance and investment ideas. Our articles, columns, message board posts and other features should not be construed as investment advice, nor does their appearance imply an endorsement by Microsoft of any specific security or trading strategy. An investor's best course of action must be based on individual circumstances.