Clear Channel Outdoor US share offer raises insider trading fears

Out of home giant Clear Channel; Outdoor is the subject of unwanted attention on Wall Street as suspicions mount about higher than usual levels of trading in its stock as it prepared a private offering of $1.25bn in so-called ‘senior notes’ carrying a special dividend of about $3.50 a share.

This was on February 27. Two days later the company announced it was doubling the loan notes offer to $2.2bn and the dividend to $6.08 per share.

“Clearly, (the news) got out,“ said Brett Harriss, a vice-president at Gabelli & Co, an asset management firm Gabelli & Co told the Financial Times. “The stock was up sharply on no news and we didn’t know why.” Gabelli’s parent company owns six per cent of CCO’s stock.

The main beneficiary of the offer and special dividend was Clear Channel Communications which owns 89 per cent of CCO with the remainder publicly traded. CCC, purchased in an $18bn buyout deal in 2008, is owned by private equity firms Thomas H Lee Partners and Bain Capital. CCO has lent about $656m to its parent company under a so-called ‘service arrangement’ since the buyout deal. Clear Channel bought the UK’s More Group popster business in 1998.

Whether or not any of this is likely to affect CCO’s trading is unclear. The company, now headed by former ad agency executive William Eccleshare, has laboured under its mighty buy-out debts for years now which has inhibited its ability to match rivals like French-owned JC Decaux in introducing new outdoor formats.

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