The Wall Street Journal-20080215-Earnings Digest- Clear Channel-s Earnings May Bolster Buyout

Return to: The_Wall_Street_Journal-20080215

Earnings Digest: Clear Channel's Earnings May Bolster Buyout

Full Text (325  words)

Clear Channel Communications Inc.'s better-than-expected earnings and outlook for the first quarter may offer encouragement to investors nervous about whether the company's buyout will go through.

Clear Channel said after the close of regular trading that its fourth-quarter profit jumped 52%. The San Antonio radio and outdoor- advertising company also said early bookings point to a 4% first- quarter revenue decline in its radio business and 4.5% revenue growth for its billboard division, in line with or better than investor expectations.

The earnings may be signs the company can stay above water in a dwindling radio industry, giving less ammunition to parties who may want the company's long-running deal to go private to be renegotiated or spiked.

Clear Channel also filed its annual report yesterday with the Securities and Exchange Commission, a step toward finishing the $19.5- billion deal.

The remaining question marks are whether private-equity companies Thomas H. Lee Partners and Bain Capital remain committed to a deal that now looks expensive, and whether the consortium of banks providing buyout financing will hold up their end.

Investors remain worried that the Clear Channel deal will fall apart. In 4 p.m. New York Stock Exchange composite trading shares were at $30.13, up 2.2%, but about $9 below the deal price of $39.20 a share, reflecting pessimism about the deal going through. In after- hours trading yesterday, Clear Channel shares edged up to $30.30.

Most deal hurdles have been cleared. Wednesday, the Justice Department allowed the sale to go forward, with conditions, marking nearly the final step in the long-running buyout saga.

Clear Channel agreed in November 2006 to the buyout led by THL Partners and Bain. The deal came under assault from shareholders, leading to delays as the price and terms were renegotiated several times. More recently, investors have watched as the deal has been dogged by regulatory delays, a downturn in radio advertising and nervous credit markets.

---

Mike Barris contributed to this article.