Shareholders consider Clear Channel buyout, again

Delayed and shrunken, the $17.9 billion deal for the nation's largest owner of radio stations and a global power in billboards is finally to close a week from Wednesday if shareholders approve the $36-per-share offer on Thursday.

The deal--in which private equity firms Bain Capital and Thomas H. Lee Partners would assume about $5.9 billion in existing debt and borrow another $16.4 billion to take Clear Channel private--already has regulatory approval. The lenders have deposited their portion of the funding in an escrow account. And no one expects hiccups this time.

"They're prepared to close on the 30th," said Clear Channel spokeswoman Michele Clarke. "Everybody is happy with the revised deal."

Not everyone started out happy.

When the deal was first announced in November 2006, credit was easy to get, ever-larger deals were being announced and some institutional shareholders thought the offer of $37.60 wasn't enough.

They held out twice for more money and a chance to continue owning a portion of the privatized company--concessions equity firms are usually loathe to make.

A consortium of six banks agreed to finance the deal initially, but by the time the shareholders were satisfied and regulators had signed off, the lenders had soured on the deal.

The banks had offered financing assuming they'd be able to sell the debt on the credit market, but as the markets grew increasingly afraid of bad mortgages and other new debt, there were fewer buyers for the Clear Channel debt.

Analysts estimated the banks could be stuck with $3 billion to $4 billion in write-downs as a result, and San Antonio-based Clear Channel and its buyers accused them of trying to break up the deal. Lawsuits followed.