Taking the short end

28 March 2007 By Lauren Silva

It has been mooted as a way to end the disagreement between buyers Bain and THLee and sellers Fidelity and Highfields. But it s not that simple. As the UK example has shown, shareholders don t like stub equity because they forfeit liquidity and influence.

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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 the vote date was postponed to April 19.

Twothirds of shareholders must approve the deal for it to go through. Abstentions are counted as votes against. Fidelity reportedly will vote 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. Highfields Capital also said it will vote against the deal.

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