Clear Channel mulls taking company private
EmptyClear Channel, the nation's largest radio company, might be considering taking the company private. The rumors fired up Tuesday when CNBC reported that CC is in talks with private equity firms, including Kohlberg, Kravits and Roberts.
Like other radio groups faced with a soft radio advertising market, Clear Channel's stock has been stagnant, fueling speculation that CC go private.
Other groups have taken the plunge as private equity money has circled the wagons. In June, Univision Communications agreed to a $12.3 billion sale by investors. Emmis Communications tried to go private, but ended up scrapping the idea. Earlier this month, Cablevision Systems founders the Dolans, proffered a $19.2 billion leveraged bid to buy out the cable company.
Going private is probably a long way off for CC. The big question is whether The Mays Family, which control the largest voting block of CC stock, would cede control of the company. While the speculation might help CC's stock in the short run, Wall Street's musings can't reverse a sluggish radio ad market.
"A nice thought but going private transaction seems unlikely," said Jonathan Jacoby in a Banc of America Securities report. "We do not believe that the Mays family is interested in losing control of either CCU or CCO [Clear Channel Outdoor]. New private equity would exercise a large degree of control as they could own over 80 percent of the new CCU."
CC's stock (CCU) rose more than 1 percent or 42 cents to $32.20 on the report. Shares are up 2.4 percent this year, but a long way off from the $54 high the stock traded at five years ago. The San Antonio-based company is scheduled to release third quarter earnings on Nov. 6.
--with additional reporting by Jeffrey Yorke, Radio & Records