Legion Partners, a 5.1% shareholder in Clear Channel Outdoor, has written a May 16, 2023 letter to the Clear Channel Outdoor board calling for a greater urgency in asset sales.   Some of the highlights of the letter.

Clear Channel Outdoor stock has underperformed.

The letter points out that Clear Channel Outdoor stock has underperformed the out of home peer group by 35% during the past year and 65% since the Clear Channel Outdoor spinoff due to “1) high leverage, which amplifies volatility, and 2) a suboptimized conglomerate structure, which increases complexity.”

The parts are worth more than the whole.

Legion Partners estimates that Clear Channel Outdoor’s stock would be worth $3.57  if the parts were sold, versus a share price of $1.07 today.  This assumes a valuation of 11.5 times EBIDTA for the US and 7.5X EBIDTA for everything else.

Legion’s recommendations

The letter ends with a bold set of proposals:

• Accelerate the sale of Europe-North.
• Sell Latin America.
• Consider selling US Assets.
• Explore a sale of the entire company

Billboard Insider’s take:  Glad someone finally said it.  The parts are worth more than the whole at Clear Channel Outdoor.   Get smaller and more focused and pass the assets to lower leveraged owners who can invest in growth.  Time for the board to step up.  No management team will ever willingly sell itself out of a job.

What do you think Clear Channel Outdoor should do?  Email davewestburg@billboardinsider.com.  We’ll run a followup post.

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