updated 5/18/2007 11:40:12 AM ET 2007-05-18T15:40:12

The board of Clear Channel Communications Inc. on Friday accepted a further sweetened offer from private equity firms trying to buy the radio and billboard company.

The offer at $39.20 per share is similar to one the board rejected two weeks ago because it didn't believe the half-percent improvement was enough to persuade opposing shareholders to accept the deal. Last week, the board postponed its scheduled vote on the earlier $39 per share offer at the urging of some shareholders.

The new offer by the equity group led by Thomas H. Lee Partners LP and Bain Capital Partners LLC is valued at about $19.45 billion, plus the assumption of about $8 billion in debt.

Shareholders will be able to either take cash or shares in the private equity company. At least two-thirds must vote in favor of the deal for it to close, an unusually high threshold required under Texas law.

The latest offer, which will be scheduled for a vote after regulatory filings are complete, is one in a string since November. Several large shareholders had insisted the company was worth more than earlier offers and planned to vote against the buyout.

In morning trading, shares of the San Antonio-based company were at $38.17, up 39 cents, or 1 percent.

The cash part of the new offer is only fractionally higher than the one the company acknowledged would fail because of opposition from shareholders, but it gives shareholders something they didn't get previously: a chance to keep a piece of Clear Channel.

Up to 30 percent of the company may be owned by public shareholders — a highly unusual concession for private equity firms, which generally scoop companies off the public market to gain more control and profit potential.

Two weeks ago, Kohlberg Kravis Roberts & Co. and GS Capital Partners made a similar concession in their bid for upscale audio equipment maker Harman International Industries Inc.

Lawrence Hamermesh, a law professor at Widener University's School of Law in Delaware, said it's unlikely such offers will become commonplace.

They seem to be designed to placate shareholders who fear missing an opportunity at large profits as an increasing number of public firms are taken private in ever bigger deals, he said.

"Someone buying out a public company expects to make a lot of money and the public stockholders want a little piece of that action before they'll go along so they don't feel like chumps," Hamermesh said.

It was not immediately clear Friday whether some of the large Clear Channel holdouts would approve of the new offer. Fidelity Management & Research Co. and Highfields Capital Management, which together hold about 15 percent of the shares, had previously indicated they would vote against the $39 offer.

Clear Channel is the nation's largest radio-station operator, and it owns 90 percent of a billboard business that is the world's largest, with 973,000 signs.

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

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