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Clear Channel Privitization Closing in on Approval

Patience is a virtue, especially in private equity.  Since November 2006, Bain Capital and Thomas Lee Partners have been trying to buy and privatize outdoor advertiser and radio station operator Clear Channel.   The $19.5b leveraged buyout offered was approved by shareholders ($39.20/a share) but it’s been stuck in regulatory limbo. 

Recently, there’s been an increase in speculation the deal was close to falling apart. The skepticism has hurt the stock price. The stock is trading near $35, a significant discount to the $39.20 buyout price. Now there may be a positive shift.

The FCC is scheduled to make an announcement within the week.  Unofficially, the reports are the Commission has unanimously approved the deal. The Justice Department will still need to sign off.

According to proxy filings, debt for the deal will be funded as follows: $16.375bn with senior secured credit facilities; $1bn secured via a receivables-backed revolving credit facility; $2.6bn from a senior unsecured bridge loan and $1.5 funded via a senior subordinated unsecured bridge loan.

Clear Channel, which is the country’s largest radio station operator, says they expect the deal to complete in the first quarter of this new year.


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