Clear Channel Buyout Talks Fuel Concern of Management Conflicts

CLEAR CHANNEL BUYOUT TALKS FUEL CONCERN OF MANAGEMENT CONFLICTS
[SOURCE: Wall Street Journal, AUTHOR: Sarah McBride sarah.mcbride@wsj.com and Dennis K. Berman]
At Clear Channel, the nation's largest holder of radio stations, the board is weighing two bids that could lead to a buyout valued at nearly $18 billion, plus the assumption of $8 billion in debt. Among those who have participated in some of the boardroom deliberations on the potential deal are Clear Channel Chairman Lowry Mays, Chief Executive Mark Mays and President and Chief Financial Officer Randall Mays, all members of the company's founding family. Clear Channel has conducted a lightning-fast auction that has produced bids from two groups of private-equity investors, both of which are willing to keep Mark Mays, 43 years old, and Randall Mays, 41, in senior management, say people familiar with the matter. Wall Street bankers expect any deal also will allow 71-year-old Lowry Mays, the family patriarch, to cash out and leave the company. The situation at Clear Channel and at other companies that have pursued such deals has fed a growing concern: that corporate executives may be pushing for transactions that are ideal for themselves but might not be optimum for other shareholders. A primary issue would be whether the company adequately considered proposals from bidding groups less friendly to the Mays family. Another key question: Whether the board seriously considered a break-up plan that, at least according to some observers, could fetch more money than if the company were sold in one piece.
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