Clear Channel Communications'
What's the impediment to getting the deal done? The company's two largest shareholders, Fidelity Investments and Highfields Capital Management, believe that Clear Channel is worth more than the agreed-to price. Highfields recently increased its stake in the company to about 5% of the total shares out, up from the 3% it previously owned. Fidelity owns slightly less than 10% of the company's shares.
Opposition to the deal -- whose passage would require the approval of two-thirds of the company's holders -- is also based on an analysis by advisory firm Glass Lewis, which believes that Clear Channel's real value lies between $39.71 and $41.40 per share. That opposition has resulted in the company's board moving the date of the shareholders vote to April 19, from the previous March 21. Shareholders of record on March 23 will be permitted to vote, itself a revision from the earlier January 22 date.
In the meantime, Clear Channel CEO Mark Mays and the company's president -- and his brother -- Randall Mays, two sons of the company's founder Lowry Mays, are attempting to generate institutional support for the buyout, with the aid of Goldman Sachs
But those who would like to see the buyout scuttled point to the company's approximately 90% ownership of billboard company Clear Channel Outdoor
So we're a month away from a resolution of the planned private buyout. Given the distinct possibility that the deal does not get done, along with the subsequent incentives for management to push hard to increase shareholder value, I believe that the company warrants careful attention from Foolish investors.
For related Foolishness:
Find the right fit for your personal investing needs by sampling any of our Foolish newsletters free for 30 days.
Fool contributor David Lee Smith does not own shares in any of the companies mentioned. He welcomes your questions or comments.