Radio b'caster hires Goldman Sachs to study options
Its stock down for most of the year and its business under continued assault from iPods, satellite radio and the Internet, Clear Channel Communications, the largest U.S. radio broadcaster, is considering a sale of the company.
On Wednesday, it said it had hired Goldman, Sachs & Co. as a financial adviser to help in “evaluating various strategic alternatives to enhance shareholder value.” Its shares jumped 7% in after-hours trading following that announcement.
Earlier this week, media reports had speculated that the Mays family, the controlling shareholder in the company, was warming to the idea of a leveraged buyout of the company. A buyout by the Mays family would presumably be one of the alternatives under evaluation by Goldman. Another possibility would be an outright sale to a private equity group or other buyer.
Kohlberg Kravis Roberts, Providence Equity Partners and Blackstone Capital have been mentioned as interested potential buyers. None were available for comment late Wednesday.
The Mays family owns about 7% of Clear Channel. Lowry Mays in chairman; Mark Mays is CED and brother Randall is chief financial officer.
The company already has spun off its live entertainment unit, Live Nation, and sold shares of its outdoor advertising unit, Clear Channel Outdoor Holdings, in an IPO.
Radio stocks have been out of favor with investors recently amid a sluggish advertising environment and other media competing for listener’s time. Shares in Clear Channel traded at more than $90 in early 2000 but have been in the $30 range or below this year. Rumors of a company sale have sent the stock upward in recent days — shares were $29 at the beginning of this month and closed at $32.35 in regular trading Wednesday. Shares shot up to $34.60 in after-hours trading.
(Variety wire services contributed to this report.)