Clear Channel deal finds static

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Things have gotten a bit complicated for shareholders of the nation's biggest radio company.

Days before a vote was set to determine whether Clear Channel Communications would be sold to private-equity groups, the company said it has rejected an offer from the bidders to alter their terms.

The group led by Bain Capital Partners and Thomas H. Lee Partners, apparently aware that its existing $39-a-share offer could be rejected by shareholders at Tuesday's scheduled meeting, offered to pay less to the founding Mays family and board members in order to increase what was to be paid to unaffiliated shareholders.

Thomas H. Lee Partners is part of a consortium of private-equity companies that owns the Nielsen Co., parent company of The Hollywood Reporter.

Clear Channel said the proposal was to give $39.20 per share to the unaffiliated while paying $37.60 a share to the Mays family and the board. In that way, the buyers might entice more votes in favor of a sale without having to pay more than the planned $19.6 billion for the company.

The prospective buyers also said they would allow shareholders to take cash or stock in the surviving corporation, with the shares trading over the counter and not listed on any national stock exchange.

But the Clear Channel board of directors, with the three Mays family members and another member recused, voted not to accept the new terms and structure, they said last week. That's because acceptance of the proposal, the board said, would have resulted in a delay of Tuesday's special meeting for as many as 90 days "with no certainty that the transaction would be approved by the company's shareholders."

Only a vote of one-third of the outstanding Clear Channel shares is needed to reject the existing offer, and Clear Channel said that the tabulated proxies received so far indicate a vote against a sale.

Proxy advisory services Institutional Shareholder Services and Glass Lewis have each recommended against the sale, with the latter saying Clear Channel is worth from $39.71-$41.40 a share.
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