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As Shareholder Vote Looms, Firms Sweeten Clear Channel Bid

As predicted, the two private equity firms bidding for Clear Channel, prompted by fears that their bid may be rejected by shareholders, have proposed sweetening their offer.

Last week, the firms were said to be considering raising their offer. Now, in a letter to Clear Channel’s board, the companies have proposed several alternatives, such as letting shareholders co-invest in a small part of the deal in what is known as a stub, writes The New York Times. If the deal proves successful, the stub would allow investors a greater return.

The restructuring of the deal may or may not be enough to satisfy Clear Channel’s shareholders, some of whom have publicly said the offer from Bain Capital and Thomas H. Lee Partners was too low. Clear Channel had sent a letter to shareholders urging them to accept the deal and had also postponed the date of the shareholder vote by a month, to April 19.

Analysts such as Glass, Lewis & Company have recommended shareholders reject the original bid. Investors such as Fidelity Investments that have planned to vote against the bid were hoping for a sweetened offer of at least $1.50 a share more.