Clear Channel Communications, the largest U.S. radio station operator, said on Thursday it received a new merger proposal from a private equity group, but its board voted against it.
Bain Capital Partners and Thomas H. Lee Partners proposed to increase payments to unaffiliated Clear Channel shareholders to $39.20 from $39 per share, and give shareholders an opportunity to choose between cash and stock in the surviving company, the company said.
Two institutional proxy advisory services, Institutional Shareholder Services and Glass Lewis & Co., had recommended against the earlier $19.5 billion bid to take Clear Channel private, saying $39 a share was too low.
According to a term sheet contemplating a change in the terms and structure of the proposed merger, Chairman Lowry Mays, Chief Executive Officer Mark Mays, Chief Financial Officer Randall Mays and each director of the company would receive $37.60 per share in cash for each share.
Following the merger, the shares would trade over the counter, and not be listed on any national stock exchange.
Clear Channel's board, with the Mays recused, voted not to accept the new terms and structure, the company said.
The board noted that the increase in merger consideration was only 0.5% more than currently provided for. The change in structure also would require a delay in the date of the special meeting of up to 90 days with no certainty that the transaction would be approved by shareholders.
Since April 18, when the merger consideration was increased from $37.60 to $39 per share, significant shareholders have privately or publicly made known their opposition to the merger at $39 per share, Clear Channel said.
On Wednesday, Clear Channel said it agreed to sell 362 radio stations for $820 million as it divests assets in accordance with its embattled plan to go private. Clear Channel did not name any of the buyers of the radio stations.
In November, the company said it planned to sell its television group as well as 448 of its 1,150 radio stations when it agreed to a takeover offer of $36.70 a share from Thomas H. Lee and Bain Capital.
Clear Channel shares closed at $35.95 on the New York Stock Exchange on Thursday.