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Clear Channel to Sell Television Group for $1.2 Billion

U.S. broadcaster Clear Channel Communications said it will sell its television group to Providence Equity Partners for about $1.2 billion.

The sale comes as Clear Channel's shareholders consider a nearly $19.5 billion private equity buyout offer for the company.

Bidders Thomas H. Lee and Bain Capital raised their offer for Clear Channel earlier this week, though it is unclear whether they will persuade enough shareholders to support the deal.

Clear Channel announced plans to sell the television group as well as 448 of its 1,150 radio stations when it agreed to the original buyout deal with T.H. Lee and Bain in November.

It said on Friday it will sell to Providence Equity 56 television stations located in 24 markets across the U.S., as well as their related Internet sites and wireless projects. The deal is expected to close in the fourth quarter, subject to regulatory approval.

"It's a good result and better than we were expecting on an absolute basis (in terms of price) a couple of months ago, but that said, the TV market is very robust right now," said David Bank, analyst at RBC Capital Markets.

The television group includes 10 CW stations, eight Fox stations, seven NBC stations, six ABC stations and six CBS stations, among others, the company said.

Clear Channel said it continues to pursue the divestiture of 287 radio stations in 54 markets, having already reached agreements to sell 161 radio stations in 34 markets for a total of $331 million.

Shareholders will vote on the $19.5 billion buyout on May 8.

The deal faces a particularly difficult hurdle because under Texas law two-thirds of all Clear Channel's shares must approve the transaction, rather than two-thirds of votes cast.

It remains unclear whether the raised price will persuade enough investors to support the deal.

One key persuader could be if influential proxy advisory service ISS changes its decision on the deal. ISS recommended shareholders to vote against the original bid. A spokeswoman for ISS said on Wednesday it was monitoring the situation but declined further comment.

"Maybe the sweetened bid gets them there -- but I don't think that it's quite enough," said Bank. "I think part of the reason they sweetened the bid may be (so) that ISS ... changes their recommendation."

Thomas H. Lee and Bain Capital raised their bid from $37.60 to $39 a share on Wednesday.