The news all came in one announcement sent this morning:
“Clear Channel Communications Inc. (NYSE:CCU) announced today that its Board of Directors has approved a plan of strategic initiatives focused on significantly increasing shareholder value. The plan includes:
– An initial public offering of approximately 10% of Clear Channel Outdoor;
– The 100% spin-off of Clear Channel Entertainment;
– A $3.00 per share special dividend; and
– A 50% increase in the Company’s recurring quarterly dividend.”
The changes are expected to take effect in the second half of the year. Clear Channel must get final approval by its board, a letter from the IRS relating to the Clear Channel Entertainment spin-off and meet other conditions; but shareholder approval is not required, it said.
In the statement President/CEO Mark Mays said the company is “seeking to unlock the considerable value in our company … We expect these transactions to highlight the fundamental value of each of our leading businesses in a tax-efficient manner, so that current and future investors can more clearly evaluate the company’s overall inherent value.”
CFO Randall Mays said the company is thus “returning a considerable amount of excess capital directly to shareholders.” In the statement, Chairman Lowry Mays called it a “transforming event” for the company.
What will be left?
“The remaining businesses of Clear Channel Communications will continue to represent the world’s largest broadcasting portfolio, including the Company’s 1,189 owned and operated domestic radio stations, equity interests in various international broadcasting companies, a leading national radio network and 40 owned or programmed TV stations,” it stated. “In addition, following the IPO, Clear Channel Communications will continue to own approximately 90% of Clear Channel Outdoor.”
Mark Mays said: “We are highly confident in the future growth prospects of the broadcasting business. … We are the best equipped radio broadcaster to benefit from a rebound in advertising while leveraging the sustainability of local content.”