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Group to vote no on Clear Channel buyout

/ Source: The Associated Press

Clear Channel Communications Inc.’s biggest shareholder, Fidelity Management & Research, plans to vote against the proposed $18.7 billion private equity buyout of the radio giant, a person familiar with Fidelity’s position said Monday.

The person told The Associated Press that the mutual fund company, which owns nearly 11 percent of outstanding Clear Channel shares, will cast a vote against the deal at a shareholder meeting set for March 21. The person spoke on condition of anonymity because Fidelity hasn’t publicly commented on its position.

The offer of $37.60 in cash per share and the assumption of $8 billion in debt, made by an investment group led by Thomas H. Lee Partners LP and Bain Capital Partner LLC, requires two-thirds of shareholders to approve the deal. Those shareholders who fail to vote will be counted as “no” votes.

The offer for the nation’s biggest radio station operator is considered by Fidelity to be “a significant discount to the true value of the company,” said the person familiar with Fidelity’s position.

Fidelity spokeswoman Jenny Engle declined to comment late Monday, saying Fidelity has a policy against discussing individual holdings.

The cash offer by the investment group was a 10.2 percent premium over the closing stock price the day before it was announced on Nov. 16. Spokesmen for Thomas H. Lee and Bain Capital declined to comment Monday on the shareholder vote.

Clear Channel spokeswoman Michele Clarke also declined to comment, saying the company “doesn’t comment on rumors and speculation.”

At the time the proposed sale was announced, Clear Channel owned or operated 1,150 radio stations, but it announced it would sell 448 stations, all located outside top 100 markets, and its 42-station television group.

The acquisition was not dependent on those sales, but the company has proceeded with divesting those stations.

Clear Channel’s shares fell 79 cents, or 2.1 percent, to close Monday at $36.31 on the New York Stock Exchange.