updated 5/4/2007 11:09:57 AM ET 2007-05-04T15:09:57

Clear Channel Communications Inc. said Thursday its board of directors has rejected a private equity group's modified buyout offer for the radio and billboard company, and there already are enough shareholder votes against the existing $19.35 billion bid to defeat it.

The new offer from the group led by Thomas H. Lee Partners LP and Bain Capital Partners LLC contemplated an increase in the payment to unaffiliated shareholders from $39 to $39.20 per share. Under the new proposal, shareholders could have chosen to receive cash or shares in the newly private company.

But Clear Channel's board decided not to accept the new terms and structure, noting that the increase was only 0.5 percent more than already offered and there had been opposition to the previously suggested equity-stake offering.

The board said the changes would require delaying a meeting scheduled for Tuesday for shareholders to vote on the existing proposal, with no certainty the transaction would be approved by shareholders.

The company said tabulated proxies received by the board of directors so far show that the votes against the merger exceed the one-third of outstanding shares required to defeat the proposal.

With roughly 1,100 radio stations, Clear Channel is the nation's largest radio station operator.

Clear Channel's board began shopping the media company around last fall after struggling to boost its stock price in a public market that was uninterested in radio, a business that has seen growth stymied by competition from new music formats like satellite radio and MP3 players.

A deal for Clear Channel was reached last November, but even after the private equity group increased its offer from $37.60 to $39 per share in April, "significant shareholders of the company have privately or publicly made known their opposition to the merger," Clear Channel said in a statement.

Institutional Investors Services and Glass Lewis & Co. have advised shareholders to vote against the transaction, saying the price was too low, and two of Clear Channel's largest shareholders, Fidelity Management and Research and Highfields Capital Management, already indicated they would oppose the buyout. Combined, the funds own about 15 percent of outstanding shares.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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