bloggingbuyouts

Just a couple weeks ago, it looked like the $26 billion buyout deal for Clear Channel Communications (NYSE: CCU) was dead.

But then again, doing such a deal is expensive and time-consuming. So why walk away? Maybe try to find a way to get things back on track?

Well, according to a piece in today's Wall Street Journal, the deal may actually get done.

Basically, the main opposition has come from two major shareholders: Fidelity Investments and Highfields Capital Management. They have a fiduciary responsibility to get the best value for their investors, right?

That means bidding things up. And it appears that Clear Channels buyers -- Bain Capital and Thomas H. Lee Partners -- will do just that. How much? The amount is about 20 cents to $39.20 per share.

There is something else: The existing shareholders will get a chance to participate in the private company, up to 30%. So perhaps when you blend things together, the ultimate value is higher than just 20 cents per share.

And with Clear Channel's stock at about $37.79, it does look like the Street is betting that there will indeed be a deal.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Congratulations to Clear Channel Communications (NYSE: CCU) and its board of directors for rejecting one of the puniest counteroffers in history. After Bain Capital and Thomas H. Lee Partners' bid of $39 per share was rejected, the private equity guys came back with a new and improved offer: $39.20, a 0.5% increase, along with a complicated offer of a possible stake in the newly private company.

Institutional Shareholder Services has urged investors to reject the bid, and the company's tabulated proxies show that more than enough shareholders voted to reject the deal.

I'm surprised that Bain and Lee thought a 0.5% increase would be enough to get a deal done. Would shareholders really hold out for another 20 cents per share? It seems clear that they're looking for a bigger number, probably one with a four in front of it. Some sources report the deal appears dead in the water, and stock is currently trading at $36.50, well below the offer price.

If the deal is in fact dead, Clear Channel management will be under a lot of pressure to prove that shareholders did the right thing in rejecting the bid.

The $19.5 billion buyout of Clear Channel (NYSE: CCU) is still not very clear. Even when its buyers -- Thomas H. Lee and Bain Capital -- boosted the price to $39 from $37.50, some of Clear Channel's investors were not convinced.

But Clear Channel is not stopping. In fact, the firm is already paving the way for major changes.

This week, the firm sold its TV group for $1.2 billion to private equity firm Providence Equity Partners. The deal includes 56 stations.

There are also plans to sell off radio stations.

Basically, these actions are needed to pass muster with the antitrust authorities. Moreover, the cash will be helpful when debt is loaded on the balance sheet.

Yet, for Clear Channel to get its own buyout deal completed, it needs to secure a two-thirds vote from shareholders. That's a tough hurdle -- given the current stock price of $35.75, it looks like the mega deal probably won't happen.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.