Clear Channel Cash-out

[Garrett Wollman]

<<On Sat, 10 Mar 2007 12:39:42 -0500, "Bill O'Neill" <me@billoneill.us> said:

> What are Clear Channel's plans after it has divested many of the signals 
> in the queue?  More billboards?  All-Hit in China?

Their plans (or rather, the buyout firms' plans) are to use the
proceeds to pay off some of the debt that the private equity firms are
taking on as a part of their purchase of the company.  That lowers the
cost of capital for them, which if successful makes the buyout more
profitable.  They can then wait a discreet period, have a big IPO, and
pocket a few $billion in profits.

Of course, this is why some major shareholders are against the deal:
they want the buyers to pay more, given the enormous profits the
private equity types have been making on these deals lately.  Press
reports suggest that the vote will be a close one, with at least 40%
of shares voting against.

-GAWollman