CC buy out --- hot news

[shirleyschmidt]

A 5-0 vote for CLEAR CHANNEL.

According to multiple sources, the FCC has given its approval to BAIN CAPITAL and THOMAS H. LEE PARTNERS $19.5 billion acquisition of CLEAR CHANNEL.

 

[Rebafan]

Thank you for bringing this to the message boards... and letting us know about it, Here are some links talking more about this:

http://money.cnn.com/news/newsfeeds/articles/djf500/200801101518DOWJONESDJONLINE001015_FORTUNE5.htm

http://www.fmqb.com/Article.asp?id=546414

 

[radio_gal1]

hm... interesting.
so does this mean the Mays dont own CC anymore?
and would that mean that there may possibly be some more changes to CC, as far as on-air talent?

 

[davideduardo]

hm... interesting.
so does this mean the Mays dont own CC anymore?
and would that mean that there may possibly be some more changes to CC, as far as on-air talent?

The deal still has to go through DoJ approval, with a closing expected in 60 to 90 days.

In any case, the Mays family does not own CCU. The family has about 2% of share right now, and the rest is owned by investors in the company stock.

The Mays will continue to run the company just as before and now.

 

[radio_gal1]

hm... interesting.
so does this mean the Mays dont own CC anymore?
and would that mean that there may possibly be some more changes to CC, as far as on-air talent?

The deal still has to go through DoJ approval, with a closing expected in 60 to 90 days.

In any case, the Mays family does not own CCU. The family has about 2% of share right now, and the rest is owned by investors in the company stock.

The Mays will continue to run the company just as before and now.

Well if they are not the sole owners, then why would they run the company.... as far as making all the decisions? (ex: the crazy budget cuts that had so many talents laid off)
im a little confused

 

[shirleyschmidt]

Common practice in the world of business.

Yea -- as DE says the deal has to be worked through. But all those cuts of DJs and shifts was to make the company ready for sale. Ireader-digest version). I said that some time ago in a post that is what will happen.

Who know how they will handle owning CC. They an sell stations, flip, etc.. but that will come in time (could be a fe months and over the next year or two).

Personally, I would love to see them do some LA changes (but I won't say what I want because I can see the torchs being lit already).

 

[davideduardo]

Well if they are not the sole owners, then why would they run the company.... as far as making all the decisions? (ex: the crazy budget cuts that had so many talents laid off)
im a little confused

Lowry Mays founded the company with partner Red Coombs in around 1975. At some point, to raise capital to buy more stations they decided selling stock to outsiders would be better than keeping 100%. So, over the years, they sold more and more stock, which is publically traded. Since the company is doing weel, the shareholder have voted in the company suggested board, and the board keeps the Mays emplyed running it.

As Shirley says, it is the way of almost every company that goes public... the people who run GE or GM or P&G do not own it... shareholders do. There are very few privately owned big companies any more.

 

[nmoore6676]

Well if they are not the sole owners, then why would they run the company.... as far as making all the decisions? (ex: the crazy budget cuts that had so many talents laid off)
im a little confused

Lowry Mays founded the company with partner Red Coombs in around 1975. At some point, to raise capital to buy more stations they decided selling stock to outsiders would be better than keeping 100%. So, over the years, they sold more and more stock, which is publically traded. Since the company is doing weel, the shareholder have voted in the company suggested board, and the board keeps the Mays emplyed running it.

As Shirley says, it is the way of almost every company that goes public... the people who run GE or GM or P&G do not own it... shareholders do. There are very few privately owned big companies any more.

David, do you not as I do see more sell offs down the road? The central problem is that in the course of the acquisitions they (the Mays) also acquired a lot of debt. In basic accounting the balance sheet picture of liabilities versus assets affects the value of the company stocks because the stock value is based upon those figures as well as the public perception based upon business prospects and performance.

The private equity people are assuming the existing debt and further borrowing to complete the buy out. Although the pressure of stock market performance goes away, the pressure of creditors and debt service will not. Also if the political climate in Washington changes the issue of multiple ownership may well be revisited and not in their favor this time. If they are going to sell they would want to do so before it is forced upon them.

 

[davideduardo]

David, do you not as I do see more sell offs down the road? The central problem is that in the course of the acquisitions they (the Mays) also acquired a lot of debt. In basic accounting the balance sheet picture of liabilities versus assets affects the value of the company stocks because the stock value is based upon those figures as well as the public perception based upon business prospects and performance.

The debt to equity ratio of CCU is lower than that of General Electric and at a very reasonable level. The recent sale of many stations can totally pay it off. Most of CCU's major expansion in radio was paid via equity issues or merger, both of which incur no debt.

The private equity people are assuming the existing debt and further borrowing to complete the buy out. Although the pressure of stock market performance goes away, the pressure of creditors and debt service will not. Also if the political climate in Washington changes the issue of multiple ownership may well be revisited and not in their favor this time. If they are going to sell they would want to do so before it is forced upon them.

The private equity deal is almost all debt financing. They go from light debt, which is almost paid off, to one of the higher debt as percentage of equity around.

 

[nmoore6676]

David, do you not as I do see more sell offs down the road? The central problem is that in the course of the acquisitions they (the Mays) also acquired a lot of debt. In basic accounting the balance sheet picture of liabilities versus assets affects the value of the company stocks because the stock value is based upon those figures as well as the public perception based upon business prospects and performance.

The debt to equity ratio of CCU is lower than that of General Electric and at a very reasonable level. The recent sale of many stations can totally pay it off. Most of CCU's major expansion in radio was paid via equity issues or merger, both of which incur no debt.

The private equity people are assuming the existing debt and further borrowing to complete the buy out. Although the pressure of stock market performance goes away, the pressure of creditors and debt service will not. Also if the political climate in Washington changes the issue of multiple ownership may well be revisited and not in their favor this time. If they are going to sell they would want to do so before it is forced upon them.

The private equity deal is almost all debt financing. They go from light debt, which is almost paid off, to one of the higher debt as percentage of equity around.

Would you then say that the recent cut backs, most notable to us because of the Burbank shifts, were totally motivated by revenue vs expenses.

The sell offs may well have sufficiently reduced the debt, but I understood that more financing was secured to complete the transaction. Since I don't have their balance sheets I'm only speculating on news reports and stock valuation. Part of the bitter pill was that the stock dropped in price and almost to an unacceptable level which held off the finalization of the Privatization deal.

However if the regulatory picture shifts it would be to their advantage to shed some properties before the fire sale. Even if the present clusters are grandfathered it makes their future sale of all or part a bit less palatable which is what ruffled so many feathers years ago when they wanted to break up the AM-FM and AM-FM-TV combos. Also the extra cash in hand to make advance debt reduction would not be a bad idea given the way the economy is heading in the credit area.