TH Lee, Bain increase Clear Channel bid

Thomas H. Lee and Bain Capital have increased their offer for Clear Channel by nearly 4 percent, valuing the buyout at more than $27 billion. The private equity firms have said it is their final offer.

Private equity firms Thomas H. Lee Partners and Bain Capital have amended their buyout agreement with Clear Channel Communications, giving the proposed deal a total value of $27.1 billion (€20 billion) including some $7.7 billion in debt. The firms are now offering shareholders $39 per share instead of the previously agreed $37.60 per share.

The firms released a statement late Wednesday saying it is their “best and final offer”.

The amended agreement comes just days after The California Public Employees’ Retirement System became the latest shareholder to voice opposition to the original offer, and one day before shareholders were scheduled to vote on the buyout. Fidelity Management and Research and Highfields Capital Management have also said they would oppose the initial buyout offer, arguing that it undervalued the company.

The increased share price represents a 33.3 percent premium over the San Antonio, Texas-based communications giant’s average closing share price during the 60 days prior to 24 October 2006, when it said it would explore strategic alternatives.

Clear Channel’s board has unanimously approved the amended merger agreement, and rescheduled its shareholders’ vote on the buyout for 8 May. Two-thirds of the company’s shareholders must approve the transaction for it to proceed.

In a statement, Clear Channel said it has “agreed to pay certain fees if the merger does not close”.