Clear Channel Agrees to $18.7B Buyout

Thomas H. Lee and Bain Capital win the radio giant.
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Radio station giant

Clear Channel Communications

(CCU) - Get Report

agreed to be taken private by a group led by Thomas H. Lee Partners and Bain Capital for $37.60 a share, or roughly $18.7 billion.

The purchase price represents a 25% premium over Clear Channel's average closing price of $29.99 during the 30 trading days ended Oct. 24, the day before the company announced it was evaluating strategic alternatives.

Including the assumption of debt, the deal is valued at $26.7 billion.

San Antonio, Texas-based Clear Channel also said it will sell 448 of its 1,150 radio stations, as well as its entire 42-station television group. The radio stations scheduled for sale are all located out of the top 100 metro markets. Collectively, these properties comprised less than 10% of the company $6.61 billion in revenue last year.

Clear Channel's buyout reportedly came down to two prospective private equity consortiums: the Thomas H. Lee/Bain Capital duo and a group consisting of Providence Equity Partners, Blackstone and Kohlberg Kravis Roberts. Most analysts were expecting the company to be

bought for $36 to $38 a share.

The deal isn't conditioned upon a merger, consolidation or going-private transaction for Clear Channel Outdoor Holdings, the outdoor advertising unit that had been considered a wild card in the auction process.

At the request of the disinterested directors, Clear Channel said, three members of senior management have agreed to significantly reduce payments that could be payable upon a change of control by an amendment to their employment agreements. The Mays brothers who founded the company have been criticized for the huge payouts they could have been due in a buyout.