Clear Channel $18.7 Million Buyout Deal Finds Opposition

January 29th, 2007 - - Filled in: Business/Consumer

According to an article released tonight on Yahoo! Finance (via the Associated Press), Clear Channel Communications Inc.’s biggest shareholder, Fidelity Management & Research, will cast a vote against the deal at a shareholder meeting set for March 21 according to an anonymous source. The mutual fund company owns 11 percent of outstanding Clear Channel shares.

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.

This and other opposition may come as a result of the increase in Clear Channel Outdoor Holdings Inc. (NYSE: CCO) over the last 52-week period. The stock price has risen 66.9% to $31.14 (as of 01/29/2007 close). If you aren’t familiar with how a proxy vote works, each publicly-traded company is required by the SEC to disclose its methods and procedures includes instructions on how to contact the Board of Directors; the number of votes FOR an issue that constitutes a majority; and, above all it gives shareholders an opportunity to vote on an issue or issues without having to attend an annual or special meeting. Shareholders receive one vote per share, unless they own shares carrying additional voting provisions.

According to a Press Release issued today on the Clear Channel website, “approval of the merger agreement requires the affirmative vote of two-thirds of the votes entitled to be cast by the holders of the outstanding shares of common stock. The failure to vote or abstaining from voting has the same effect as a vote against the merger agreement. Accordingly, please sign, date and return the enclosed proxy card promptly in the envelope provided to vote FOR the merger! If you hold your shares through a bank, broker, or other custodian, that custodian will not vote your shares without your instruction. Please follow the procedures provided by your custodian to ensure that your vote is represented at the special meeting.

This news has been alluded to sometime throughout the last couple of weeks in the Wall Street Journal. You can read the rest of Michelle Roberts’ Yahoo! Finance article here. And for more information about proxy voting, visit Investopedia.com.