Clear Channel Is Sold...To Divest Stations...

[KharmaTrain]

http://www.radioandrecords.com/radiomonitor/news/business/top_news/article_display.jsp?vnu_content_id=1003408868

Clear Channel's Board of Directors on Thursday (Nov. 16) accepted a $26.7 billion offer from private equity investors Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P. that will take the massive multimedia company private at $37.60 per share. That’s about a 25% premium on the stock based on a 30 trading days average that ended on Oct. 24, the day before the San Antonio-based company announced that it had hired investment bank Goldman, Sachs and Co. to evaluate its strategic options. Clear Channel said the $26.7 billion offer includes the assumption or repayment of approximately $8.0 billion of net debt.

The merger is subject to the approval of Clear Channel’s shareholders and regulatory authorities and Clear Channel may also consider competing bids through Dec. 7, and may negotiate with parties that submit competing proposals by that time until Jan. 5. An unspecified break up fee would apply, Clear Channel says.

Clear Channel said it intends to sell “448 radio stations in selected small markets as well as its television broadcasting division.” However, the merger is not pending on the sale of any of the transactions.

As I had predicted, this could signal some big changes in the radio and television landscape in the next year. I suspect more shoes will drop in the weeks and months ahead as CBS continues floating rumors of unloading a number of their smaller radio stations, Tribune company appears to be on the verge of being cannibalized as well, Disney struggles with a year-long sale to Citadel and NBC/Universal continues to hand out pink slips around the country.

Should be some interesting times ahead on your local radio dial.

[Hosnon]

1. HOORAY! A market is not entitled to things such as deregulation unless

it somewhat satisfies the elements of being a market, one of which is competition.

[KharmaTrain]

4. This Is Marketplace Deregulation...

I could waste a lot of electrons as to what is happening here, but it's usually ignored. So I'll just leave it as this is a good and bad thing. Good that opportunities could be had to restore radio stations to local control, but with few local operators around, there's not that many standing by with cash on hand. Also, these companies will fight to keep the property values high to preserve their market value...thus the choice could be to shut stations down rather than sell them for pennies on the dollar.

There could be more to this deal in the days/weeks ahead...

http://www.radioandrecords.com/radiomonitor/news/business/top_news/article_display.jsp?vnu_content_id=1003408918

This may not be over yet – CCU reserved the right to solicit other offers through Dec. 7th,” Jacoby points out, adding that Clear Channel may negotiate with parties that submit competing proposals by that time until Jan. 5.

Also, the “asset market could get crowded – CCU also plans to sell 448 radio stations and its TV assets (42 stations),” Jacoby theorizes. “We remain cautious on the radio group – private equity interest likely is related to the company’s outdoor assets, in our view. We note that the implied purchase price for the radio assets is 10% below its peers.” He is also concerned that “audience erosion will continue to cap top-line growth over the next decade, whether radio 'goes Google' or not.”

Bear Stearns media analyst Victor Miller had valued Clear Channel "in the $39 to $41 range" with multiples three times to 7.5 times higher than current bids. Miller wonders if the scale of the entire deal is "holding down the price a bit?" He adds, "One could argue that the implied price for CCU does not adequately reflect radio's value."

[Hosnon]

13. If the stations are simply shut down, that is a bad thing. However, if they are sold

off to different local people/entities then I view that as a good thing. And since the result would be greater competition, greater deregulation would be justified.

[CrazyOrangeCat]

2. Interesting post . . . thanks.

Wish we could go back to the crazy and cool FM stations of the mid-Seventies.

Not holdin' my breath . . .

[KharmaTrain]

8. They're Out There...Just On The Internet Now...

And soon to your IPOD, Cellphone and PDA.

And the music sounds better than ever.

[tridim]

3. Go get em NovaM!

[Renew Deal]

5. The Howard Stern effect

Stern was the last giant of the old media.

[Botany]

6. This will allow dropping Stephanie Miller, Ed, Air America.

and all those other liberal talk shows some of which are doing great.

[ihelpu2see]

7. hopefully this meas I can finally get AAR on a local station here in CT

one of the bluest states.... I have to listen thru static to get 1600 HMC out of North Hampton Ma.

[KharmaTrain]

10. AAR Won't Survive Much Longer...But Others Are On The Way

Clear Channel owns the stations...Air American is a program provider and many predict won't survive bankruptcy.

Two companies have emerged to pick up the ball. One is NovaM...the other is Jones Radio...who distributes Ed Schlutz and is ready to pick up other shows. They're looking for the next "Progressive Radio Star"

Here are the details:

http://press.xtvworld.com/article14595.html

[magellan]

9. Bain Capital is a Mitt Romney start-up

It has ties to Carlyle Group, Frist, and has previously bought up corporations now considered to be big GOP backers.

[KharmaTrain]

11. CCR Has Booosh Connections, Too...

Loewry Mayes is a boooosh Pioneer and Thomas Hicks was boooshies partner in the Texas Rangers.

No surprise there's a Carlyle Group interest here...seems they've been interested in various media groups in recent months. Better their money than ours.

[Ian David]

12. Bain Capital is Der Mittenfuhrer's (Mitt Romney's) company

Mitt Romney
From dKosopedia

Willard "Mitt" Romney was elected 70th Governor of Massachusetts in 2002 by a margin of 50-45 over Democratic challenger Shannon O'Brien. He is fourth in a line of Republican Massachusetts governors since Michael Dukakis resigned in 1991.

<snip>

In 1984, Romney founded Bain Capital, a venture capital firm, with $37 million in private equity funds as a spin-off of the Boston-based firm Bain & Company, Inc. where he was CEO. Bain Capital was involved with financing hundreds of companies including Staples, Domino's Pizza, Sealy, Brookstone, and The Sports Authority. Romney gave up his control in the firm to a board of managing directors in 2001 to prepare for a return to politics.

More:
http://www.dkosopedia.com/wiki/Mitt_Romney

Add to the list of Bain Capital companies: Dunkin Donuts and K.B. Toys.

[HereSince1628]

14. My son, who is a program director at one of their stations, says

that it seems stations in the top 100 markets will be held, while those in smaller markets will be sold. His is gonna be sold but he expects it's rock format to remain he's in a small market but it's got a state university with about 20,000 students.