High hurdles may hamper billboard buyout


CBS OutdoorReports are out that Clear Channel Outdoor may be interested in CBS Outdoor – but it could be a tough proposition to get a deal to the finish line.

Bloomberg reported that CCO’s exec, William Eccleshare, indicated an interest in CBS Outdoor, which according to widespread reports is being shopped around.

Wells Fargo analyst Marci Ryvicker espressed her company’s belief that while Clear Channel may be interested in “kicking the tires,” there may simply be too many stumbling blocks in the path of such a deal.

First, the CBSO top asking price of $6B is considered to be way too high – most of the speculation we’ve seen at RBR-TVBR lists a price for the property as being in a very wide $4B-$6B range, with most seeing it on the lower side.

Second is the high leverage already encumbering Clear Channel. Ryvicker said it would almost have to get private equity backing, with Bain and Thomas Lee as the obvious suspects in any such scenario.

The large size of both company’s outdoor divisions could spark anti-trust concerns, on top of the other hurdles such a deal would face.

In the end, Wells Fargo believes that the combination of CBS’s high price and Clear Channel’s high leverage add up to a low chance for a done deal.