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Clear Channel sells its TV group

SHARE Clear Channel sells its TV group

SAN ANTONIO — Clear Channel Communications Inc., the nation's largest operator of radio stations, said Friday it agreed to sell its 56 television stations to a private equity firm for $1.2 billion.

The company had announced it would sell the stations last November, part of a divestiture that includes the possible sale of 448 radio stations. So far, the company has reached agreements to sell 161 radio stations for a total of about $331 million.

Clear Channel owns more than 1,100 radio stations nationwide and plans to retain about 675, mostly in larger markets. The company owns six radio stations and two TV stations — KTVX-Ch. 4 and KUCW-Ch. 30 — in the Salt Lake broadcast market.

The divestiture plan was announced at the same time the company first disclosed that it agreed to be acquired by a group of private equity investors, led by Bain Capital Partners LLC and Thomas H. Lee Partners LP.

That plan ran into some resistance from several large shareholders who argued the sale price was too low. The equity groups on Wednesday sweetened their buyout offer to $39 per share, or $19.35 billion, plus the assumption of about $8 billion in debt, in an effort to win over skeptical shareholders.

The new buyout offer faces a shareholder vote May 8.

Providence Equity Partners, which specializes in media and communications holdings, will acquire the Clear Channel television stations by the end of the year, pending regulatory approval.

The group, located in 24 markets, consists of 10 CW, eight Fox, seven NBC, six ABC, six CBS, four My Network TV, two NBC Weather Plus, two Telemundo, five independent stations, and six stations affiliated with Clear Channel's Variety Television Network.

David Bank, an analyst for RBC Capital Markets, said the overall sale price of the television group is probably a little higher than he would have initially anticipated, but the outlook for television has improved in recent months.

Generally, the divestitures are helping Clear Channel cash out investments that are viewed more favorably by private equity than they are by the public markets right now, he said.

Regardless, it's unlikely to sway shareholders on the leveraged buyout, Bank said.

The question continues to be whether shareholders want to bear the execution risks that will be required to get more out of Clear Channel's radio and billboard businesses, rather than sell it to the private equity group.

"It still comes down to a bird in the hand versus two in the bush," Bank said.