Major Investor Backs Clear Channel Sale

Clear Channel Communications' largest institutional shareholder, Highfields Capital Management, gave a vote of confidence in the company's planned sale to Bain Capital and Thomas H. Lee Partners last week, with its purchase of millions of shares bringing its ownership of the company to 7.7%. Previously, Highfields owned 5% of the company's stock.

Highfields made the purchase shortly after one radio analyst, Jim Boyle of CL King and Associates, voiced concern that the company's sliding stock price might have Bain and Thomas H. Lee reconsidering their planned $20 billion purchase.

The two private-equity firms agreed to pay $39.20 a share to take the company private, but general weakness in the radio industry drove the price as low as $28.00 in recent weeks. They have until June to break off the deal, if it hasn't gone through by that date.

The Highfields buy on Wednesday and Thursday seems to indicate the big shareholder is still betting the sale will go through. And by buoying the stock price up to $30.70 on Thursday ($30.91 at press time on Monday), Highfields may help reassure the private-equity firms, which are said to be leery of paying too high a premium for the stock.

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