Here are press release excerpts from Clear Channel Outdoor confirming the sale of their share in Clear Media.
Clear Channel Outdoor Holdings, Inc. (CCO) (the “Company”), one of the world’s largest outdoor advertising companies, today announced that it has entered into an agreement to irrevocably tender to sell its 50.91% stake in Clear Media Limited (“Clear Media”), an indirect, non-wholly owned subsidiary of the Company based in China, to Ever Harmonic Global Limited (“Ever Harmonic”).
Under the terms of the Company’s agreement with Ever Harmonic, Ever Harmonic will acquire the Company’s stake in Clear Media for HK$7.12 per share, or approximately US$253 million* in cash, as part of a proposed voluntary conditional cash offer (the “Offer”) made by and on behalf of Ever Harmonic. Ever Harmonic is a special purpose vehicle wholly owned by a consortium of investors comprising Mr. Han Zi Jing (chief executive officer and an executive director of Clear Media), Antfin (Hong Kong) Holding Limited, JCDecaux Innovate Limited and China Wealth Growth Fund III L.P. This represents a premium of approximately 86.88% over the average of the closing prices of the Clear Media shares as quoted on the Hong Kong Stock Exchange for the 30 consecutive trading days prior to the announced strategic review of our investment in China on November 29, 2019. Today’s announcement is a successful milestone following the process previously disclosed on November 29, 2019 to maximize the value of the Company’s stake in Clear Media.
The Company has included revenue of US$209 million and Adjusted EBITDA of US$54 million in its results for the 12 months ended December 31, 2019 attributed to Clear Media.
The Company intends to use the anticipated net proceeds of approximately $220 million from this transaction to improve its liquidity position and increase financial flexibility, subject to any limitations set forth in its debt agreements.
Insider’s take: This sale should be welcomed. Looks to Insider like the sale occurred at an enterprise valuation of 17 times cashflow if you assume Clear Media cashflow of $54 million for the 12 months ended December, Clear Media US dollar equivalent liabilities of $427 million and a total equity value of $496 million for Clear Media. Clear Channel Outdoor’s $253 million from the sale of its 51% share will pay 7 months worth of interest on Clear Channel Outdoor debt. One less distraction for Clear Channel management in turbulent times. What might have been is not what is. Had the transaction happened a year ago the price might have been even greater because cashflow would have been higher. Clear Channel Outdoor stock rose 18% on the announcement of the sale and additional liquidity measures.
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