Clear Channel: The (Recent) Longs Have It

Updated Reports are coming in from all over that the Clear Channel buyout will indeed close, after the financial sponsors and lenders came to a tentative settlement. The situation was described as “fluid” by CNBC’s David Faber, but most accounts indicate that the deal will go forward with a $36 per share sale price.

That’s significantly lower than the $39.20 per share that Bain Capital and THL Capital had originally agreed to pay, and I’m assuming that the equity checks will remain pretty constant (i.e., banks will put up less debt). Moreover, $36 is still way higher than where Clear Channel has been trading for the past month. So if you bought long recently, this is a very very good day.

The stock opened today at $30.29 per share, has has traded as low as $25.90 post-buyout announcement. The last time CCU traded above $36 was in early March. It had been trading close to the original buyout price until last November, when it became public that the sponsors and banks could not get along.

Shares are currently up at $33.04 per share.

Assuming this settlement gets signed today, I’m interested in seeing what terms get changed other than share price. The banks had given the sponsors a number of concessions, in order to get this deal done in pre-credit crunch boomtime. In fact, Scott Sperling of THL Capital has repeatedly said such concessions are the only reason that this deal makes sense for the buyers.

A CCU spokeswoman did not yet have a comment, but I’d expect one within the next few hours.

Update: Heidi Moore has some additional details over at Deal Journal, including that the sponsors will take a higher interest rate in exchange for the lowered price, and that Morgan Stanley initiated negotiations last week via a third party.

Pay particular note to the comments section, where some CCU shareholders don’t seem too excited about the lower price. I’d assume that the two sides have at least checked in with major CCU holders, but it could become very interesting if current owners begin making the private equity firms’ own arguments against them (i.e., We have a deal at $39.20).