The future of Clear Channel, which owns over 1,000 radio stations (as well as a substantial outdoor billboard advertising business), is anything but certain. The company has been negotiating a buyout with private equity companies for months. On May 3, the company’s board rejected a bid from Bain Capital and Thomas H. Lee Partners that the board stated was only 0.5% above the previous bid. This week, however, the Wall Street Journal reported (citing people familiar with the deal) shareholders are starting to get behind the deal, even as the board is rejecting it.
Shareholders Highfields Capital Management (3.2%) and Fidelity Investments (9.7%) are reported to be backing the proposal which has been raised to a price per share of $39.20 and offers current shareholders the opportunity to own up to 30% of the new company. With the support of Highfields and Fidelity at a shareholders meeting, a deal is much more likely consummated….but even so, regulatory issues will likely delay a final vote until the end of the summer by which time, pricing or market conditions might warrant further adjustments to any proposed offers.
In the meantime, while its future is anything but clear, Clear Channel Communications is busy with operational and sales efforts. On May 21st, the company announced they will launch an advertising-supported (e.g. no cost to listeners) program that will let radio listeners send text-message song requests from their cell phones and get real-time traffic updates. Listeners will also be able to participate in contests and polls via text messages. This new effort will mark a change from a pilot program run in September wherein a $2.99/month service fee gave Cingular customers access to live streaming broadcasts.
This new mobile initiative will be tested with five New York area radio stations. Anyone with a SMS-enabled cell phone will be able to participate. If successful, Clear Channel has plans to launch similar offerings at as many as 100 other radio stations over the next one to two years.