BREAKINGVIEWS-Billboard buyout puts capital conundrum on display

Clear Channel Outdoor Holdings Inc +0.42%

Clear Channel Outdoor Holdings Inc

CCO

2.38

+0.42%

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Jonathan Guilford

NEW YORK, Feb 10 (Reuters Breakingviews) - Abu Dhabi's Mubadala struck a $6 bln deal for Clear Channel, a path to financial stability for the long-beleaguered outdoor advertiser. A big slug of debt will be replaced with equity, squeezing the implied return. This is the challenge for so-called patient money writ large.

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CONTEXT NEWS

Clear Channel Outdoor said on February 9 that it had agreed to be acquired by Mubadala Capital, the alternative investing arm of Abu Dhabi-based Mubadala Investment Company.

Under the terms of the deal, shareholders in the outdoor advertising company will receive $2.43 in cash per share held, a 71% premium to the price in October before Bloomberg reported a potential sale.

Mubadala is partnering with investment firm TWG Global, while Apollo Global Management will invest preferred equity in the transaction and provide debt financing.

Guggenheim Securities and JPMorgan are advising Mubadala. Morgan Stanley and Moelis are advising Clear Channel.


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