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Clear Channel could get bids from two groups

November 14, 2006|From the Associated Press

SAN ANTONIO — At least two bids from private equity firms were expected to be submitted for the major radio broadcasting company Clear Channel Communications Inc. as the deadline for offers passed Monday, people familiar with the matter said.

One bid was likely to come from a group consisting of Providence Equity Partners, Blackstone Group and Kohlberg Kravis Roberts & Co., said a person familiar with the bidding process, speaking on condition of anonymity because Clear Channel had not yet decided when it would make a public announcement.

Another consortium reportedly interested in Clear Channel includes Bain Capital, Thomas H. Lee Partners and Texas Pacific Group. Another source familiar with the process, also speaking anonymously because there was no formal announcement, said at least one of those three firms planned to be involved in a bid submission.

Clear Channel, the largest operator of radio stations in the country, announced in late October that its board of directors had hired Goldman Sachs as a financial advisor as it evaluated "strategic alternatives to enhance shareholder value." The announcement sent Clear Channel shares surging.

The San Antonio-based company has refused any further comment since then, and a Clear Channel spokeswoman declined to comment Monday.

Goldman Sachs also said it had no comment.

Clear Channel's founding Mays family owns about 7% of the company. Lowry Mays is chairman, his son Mark is chief executive and his son Randall is chief financial officer.

Analysts have said the strategic alternatives could include a sale of the company to a private equity firm or the founding Mays family.

Clear Channel owns and operates 1,200 radio stations. It also owns the majority of a spinoff, Clear Channel Outdoor Holdings Inc., an outdoor-advertising company that sells billboard and bus stop ads.

Outdoor advertising company JCDecaux last week expressed interest in acquiring Clear Channel Outdoor.

Shares of Clear Channel fell 59 cents Monday to $34.38, near the upper end of the 52-week range.

Media and entertainment analyst James Goss of Chicago-based Barrington Research said he thought an offer would probably not exceed Clear Channel's current share value by much.

"As a primary target I'm thinking a dollar or two above where it's trading now is probably a more realistic value," Goss said, noting that there might be a premium if the company weren't auctioned off as a "comprehensive whole."

Analysts have said taking the company private could push shares toward $37 to $40 each.

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