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Contributors: Douglas McIntyre Jon C. Ogg

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Tuesday, October 24, 2006

CNBC's David Faber Describes Potential LBO for Clear Channel (CCU)

CNBC's David Faber was just out on CNBC saying that the Mays family "may" be warming up to the idea of Leveraged Buyout for Clear Channel Communications (CCU), something they have shunned in the past.

It is worth noting that the company is not as large or diverse as it once was because it has many units out there that have been spun-off and used to be tied to what is now Live Nation.

Larry Mays, Mark Mays and Randall Mays are all very influential to the company and to the board of directors but they do actually not control the company, at least not according to David Faber.

In theory Faber tossed out a 23% premium at $26 Billion LBO, which would end up being $5 Billion stock and $21 Billion debt

he also said that the deal at 9-Times EBITDA in the past would have been high, but now all of a sudden 10-Times EBITDA might actually be entertained, although he did predicate that none of this means a deal is inevitable or imminent. He said it wasn't really possible or tenable before, but investors may want to pay attention now.

This is not part of our BAIT SHOP, but it sounds like it may at least be on David Faber's watch list.

Jon C. Ogg
October 24, 2006

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