Shareholders say “yes” to CC buyout


The meeting didn’t take long, since most shares had been voted by proxy, but shareholders of Clear Channel Communications overwhelmingly voted to sell the company to a buyout group led by Bain Capital and TH Lee Partners. The tally showed that approximately 97% of the shares voted were in favor of the buyout at $36 per share. More importantly, the tally was more than enough to meet the Texas legal requirement that more than two thirds of all shares outstanding approve the sale. The number of shares actually voted in favor of the deal was more than 74% of all of the Clear Channel shares that exist.

The offer to let shareholders roll-over their shares into the new CC Media Holdings was well received, but not fully subscribed. Shareholders elected to exchange approximately 23.2 million shares for the new shares, which will not be listed on any exchange, but traded on the over the counter pink sheets as “CCMOV.”

“We are pleased with the outcome of today’s vote. On behalf of Clear Channel’s Board of Directors, I want to thank our shareholders and hard-working employees for their support throughout this process,” said Clear Channel CEO Mark Mays in announcing the vote tally. The deal to sell the company for $23.8 billion, including debt assumption, is scheduled to close Wednesday, July 30th. Under a previous legal settlement, all bank funding for the closing has already been escrowed.

Of the approximately 23.2 million shares to be exchanged for new shares in CC Media Holdings, 11,111,112 are from Highfields Capital, which was seeking the maximum any single shareholder was permitted to receive from the 30,612,245 available. If that had been fully subscribed, Highfields and other current public shareholders would have ended up owning 30% of CC Media Holdings’ equity. That will now be more like 23%, which slightly changes the calculations from our previous story on the future ownership of the company. Voting power in the new CC Media Holdings will now lie approximately 73% with Bain/Lee, roughly 10% with Highfields Capital, a little over 2% with the Mays family and about 13% with everyone else holding the Class A shares.

Since Highfields is not expected to offer any of its shares for sale anytime soon, there will only be a true public float of about 12 million shares in CC Media Holdings. RBR/TVBR will report on trading volume – and, of course, pricing – once the shares begin to trade on the pink sheets.

RBR/TVBR observation: The long saga is coming to an end. Come next Wednesday the buyout will go to closing and the new owners officially take over. We and everyone else in the radio industry will be waiting to see what the new Clear Channel will be like. How much will it start spending on promoting and improving its products? How much will it focus on getting back to driving business instead of being distracted by Wall Street and courtroom maneuvering? The management team remains the same – and it has not been impressive in recent years. Will they now surprise us?