US broadcaster and media firm Clear Channel Communications has concluded a second amendment to the agreement under which is it set to be acquired by a private equity group led by Thomas H
US broadcaster and media firm Clear Channel Communications has concluded a second amendment to the agreement under which is it set to be acquired by a private equity group led by Thomas H Lee Partners and Bain Capital Partners, offering existing shareholders a stake in the acquisition vehicle.
Clear Channel is a global media and entertainment company specialising in entertainment and information services for local communities and opportunities for advertisers. Based in San Antonio, Texas, its businesses include radio, television and outdoor display advertising.
Under the terms of the amended agreement, Clear Channel shareholders will receive USD39.20 in cash for each share they own plus additional per share consideration, if any, if the closing of the merger occurs after December 31, 2007. This represents an increase from the previous cash consideration of USD39.00 per share.
As an alternative, Clear Channel’s unaffiliated shareholders will be offered the opportunity on a voluntary basis to exchange some or all of their shares of Clear Channel common stock on a one-for-one basis for shares of Class A common stock in the new corporation formed by the private equity group to acquire Clear Channel, plus the additional per share consideration, if any.
The Clear Channel board of directors, with the interested directors not taking part in the vote, unanimously approved the second amendment to the agreement and has recommended that shareholders approve the amended agreement.
The total number of Clear Channel shares that may be exchanged for shares in the new corporation is approximately 30.6 million, which would have a total value of some USD1.2 billion (at the price of the USD39.20 per share cash consideration) and represent around 30 per cent of the outstanding capital stock of the new corporation following the closing of the acquisition.
The amended agreement provides that no shareholder will be allocated shares that would amount to more than 9.9 per cent of the outstanding capital stock of the new corporation following the closing of the merger.
If shareholders elect to receive more than the allocated number of shares of Class A common stock of the new corporation, the allocation will take place on a pro-rata basis, with shareholders receiving USD39.20 per share for any Clear Channel shares that are not exchanged. Shareholders will be offered the choice at the time of their vote on the acquisition.
The revised agreement includes provisions limiting the fees payable to the private equity group in the transaction, and requiring that the board of directors of the new corporation include at least two independent directors.
The shares of the new corporation to be issued to Clear Channel shareholders will be registered with the US financial regulator, the Securities and Exchange Commission, but not listed on any exchange.
Based in Boston and with offices in New York, London, Munich, Tokyo, Hong Kong and Shanghai, Bain Capital is a global private investment firm that manages more than USD40 billion in assets in pools of capital including private equity, high-yield assets, mezzanine capital and public equity.
Since its establishment in 1984, Bain Capital has made investments and add-on acquisitions in over 230 companies around the world, including Burger King, Warner Chilcott, Toys ‘R’ Us, AMC Entertainment, Sensata Technologies, Burlington Coat Factory and ProSiebenSat1 Media.
Founded in 1974, Thomas H Lee Partners has invested around USD12bn of equity capital in more than 100 businesses with an aggregate purchase price of more than USD100bn and completed more than 200 add-on acquisitions for portfolio companies.
The firm, which currently manages some USD20bn in committed capital, has sponsored transactions involving companies including Dunkin Brands, Univision, Nielsen, Michael Foods, Houghton Mifflin Company, Fisher Scientific, Experian, TransWestern, Snapple Beverage and ProSiebenSat1 Media.
