In a move that could bust up the nation's largest radio group, Clear Channel revealed late Wednesday (Oct. 25) it had retained Goldman, Sachs & Co. to "evaluate various strategic alternatives to e
In a move that could bust up the nation's largest radio group, Clear Channel announced late Wednesday (Oct. 25) it had retained Goldman, Sachs & Co. to "evaluate various strategic alternatives to enhance shareholder value." The news follows reports that surfaced earlier this week that the San Antonio-based group might be in talks with private equity firms about going private.
Clear Channel said in a release "there could be no assurance that this process will result in any specific transaction. The company does not intend to comment further publicly with respect to the exploration of strategic alternatives unless a specific transaction is approved by its Board."
Among the private equity firms reported to be interested in buying out Clear Channel are Providence Equity Partners, Blackstone Group and Kohlberg Kravis Roberts, which have formed a bidding consortium. The Wall Street Journal reported that a second group led by Thomas H. Lee Partners could also be circling.
However, analysts believe a leveraged buyout is the least likely of the options open to CC. "While the Mays' are likely frustrated with their stock price, we do not believe that they are interested in giving up control of the company that their father founded in 1972. We think a more likely scenario could be asset sales (i.e., small market radio stations and television assets) so as to utilize its $1.5 billion capital loss or partial spinoff of Clear Channel Outdoor," wrote Marci Ryvicker, a senior analyst with Wachovia Capital Markets.
Confirmation of earlier speculation was enough for the after-hours investors who sent shares of CCU up nearly 10% or $3.15 to $35.50 a share in after-hour trading Wednesday evening.
Clear Channel also announced that the board of directors has declared a quarterly cash dividend of $0.1875 per share on its common stock. The dividend is payable on Jan. 15, 2007, to shareholders of record at the close of business on Dec. 31.
In addition, Clear Channel has moved up the release of its third quarter financial results from Nov. 6 to Oct. 30, and will conduct a teleconference at 9 a.m. ET.