In their latest bid, private-equity firms Thomas H. Lee Partners and Bain Capital offered $39 per share for Clear Channel stock, up from a previous bid of $37.60. Despite a series of messages from the company, including a strongly worded letter sent in early March, shareholders remain intransigent--apparently unmoved by a bid representing a roughly 31% premium over current share prices.
The latest note from ISS points to several new developments as evidence the company is more valuable than the private-equity firms would have shareholders believe. One example: a deal struck by Clear Channel Radio with Google that makes a small amount of radio inventory available to the online search company, on terms that are very favorable to Clear Channel.
advertisement
advertisement
Wall Street observers say shareholders may hope to create value themselves by undertaking their own initiatives to increase the company's profitability. Rather than sell the company to private-equity firms, which would create more value by cost-cutting and other reforms, Banc of America securities analyst Jonathan Jacoby has pointed to a "greater willingness on the part of institutional investors to take many of the steps that private-equity consortia do to 'squeeze' value out of companies."
Also, Clear Channel Radio announced Wednesday that it has sold another 201 radio stations in 38 smaller markets around the country. The company intends to sell another 86 stations to complete the divestment of 362 smaller market stations, for about $370 million.