Clear Channel's music lessons

15 March 2007 By Lauren Silva

A year ago, the UK label behind the Beastie Boys rejected a 320p a share offer. Its stock now trades at 230p. Investors weighing the lowish $26bn offer for Clear Channel should consider the EMI case before they reject the deal.

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Bain Capital, THLee and the Mays family have offered to buy radio giant Clear Channel for $37.60 a share, or $26bn including debt. The shareholders were slated to vote on the deal March 21. But on Tuesday the vote date was moved to April 19, and moved the record date from January 22 to March 23.

About 205m shares, or 40% of the outstanding stock, have traded since the record date. Fidelity, which had owned nearly 11% of its stake, sold about 20% of its stake since the record date. They now own about 8% of Clear Channel's outstanding stock. According to Texas law, 67% of shareholders have to approve the bid in order for the deal to close. The shareholders that don't vote are counted as voting against the bid.

Fidelity is said to be voting against the Clear Channel deal, and this isn't the first time that Fidelity has threatened to reject a bid. Last year, the company came out against KKR when it bid for media company VNU. Ultimately the private equity group, which included Blackstone, Carlyle, Hellman & Friedman, KKR and THLee raised its offer from Euros 28.75 to Euros 29.50.

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