Clear Channel Weighs Options

NEW YORK In a move that could dismantle the nation’s largest radio group, Clear Channel said it has hired Goldman Sachs & Co. to “evaluate various strategic alternatives to enhance shareholder value.”

Reports surfaced earlier this week that the San Antonio-based group might be in talks with equity firms about going private.

Clear Channel, which owns 1,200 radio stations and 90 percent of Clear Channel Outdoor, also moved up its third-quarter conference call to Oct. 30 from Nov. 6.

The private equity firms reportedly interested in buying Clear Channel include Providence Equity Partners, Blackstone Group and Kohlberg Kravis Roberts, which have formed a bidding consortium. The Wall Street Journal reported that a second group led by Thomas H. Lee Partners could also be circling.

Analysts believe a leveraged buyout is the least likely option. “While the Mays are likely frustrated with their stock price, we do not believe that they are interested in giving up control of the company that their father founded in 1972. We think a more likely scenario could be asset sales (i.e., small market radio stations and television assets) so as to utilize its $1.5 billion capital loss or partial spin off of Clear Channel Outdoor,” wrote Marci Ryvicker, a senior analyst with Wachovia Capital Markets.

From the Telecom Act of 1996 was signed, Clear Channel was an aggressive consolidator, amassing radio stations, national rep firm Katz Media, Premiere Radio Networks, research company Critical Mass Media and radio-related software providers. The company last year sold its concert venue business and spun off 10 percent of its outdoor business to improve its financial position. Now, Clear Channel has all but hung out the “For Sale” sign.

In the last two years, the radio market has stalled and broadcasters’ stocks have fallen from favor on Wall Street. Despite efforts to stimulate market demand by reducing commercial clutter, Clear Channel’s shares (CCU) have languished. At its peak, the stock reached a record high of $95.50 in January 2000 before the dot-com boom went bust. Shares closed Wednesday at $32.35.