URL http://query.nytimes.com/gst/fullpage.html?res=9E06EFD81131F93AA25756C0A9619C8B63

DATE/ AUTHOR None	AUTHORS: Michael J. De La Merced

H On Third Time Around, Clear Channel Accepts Takeover Bid

S1 For the two bidders for Clear Channel Communications, the third time may be the charm.

S2 The company, which owns the largest radio network in the nation, agreed yesterday to accept a revised buyout offer from Bain Capital and Thomas H. Lee Partners, potentially clinching a deal that had eluded the two private equity firms for months.

S3 Unlike the previous offers, the latest one was drawn up with guidance by several shareholders, Scott Sperling, managing director of Thomas H. Lee, said yesterday.

S4 "We were guided to this spot by the shareholders," Mr. Sperling said, specifically highlighting the roles played by Highfields Capital Management and Fidelity Investments in reaching the new deal.

S5 Investors will receive $39.20 a share.
S6 Alternatively, they have the option of rolling their holdings into a cumulative 30 percent stake in the newly private Clear Channel, in what is known as stub equity.
S7 The portion available to investors is worth about $1.2 billion, but no shareholder may hold more than 9.9 percent of the new company.

S8 Bain and Thomas H. Lee have also agreed to limit their fees from the deal, as well as to allow for two independent directors for the new company.
S9 Highfields will choose one, while the other shareholders will elect the other, according to people briefed on the negotiations.

S10 A spokesman for Calpers, the California public employee pension fund, said it supported the latest offer; Calpers holds 3.3 million shares of Clear Channel.
S11 ''What we focus on is what will get the highest value for our members,'' the spokesman, Brad Pacheco, said.

S12 Shares of Clear Channel closed at $38.23 yesterday, up 1.2 percent.

S13 The deal is substantially the same that Bain and Thomas H. Lee offered earlier this month -- and that Clear Channel initially rejected.
S14 But a few days later, several institutional investors, including Highfields, a hedge fund, urged the company to take more time to consider the offer.

S15 After Clear Channel's announcement on May 7 that it would reconsider the revised buyout offer, the company took about a week before agreeing to the new bid.

S16 The six-month-long contest illustrates the increased assertiveness of public investors, as private equity firms have acquired scores of companies.
S17 In the bidding for Clear Channel, the power of shareholders was amplified by the law in Texas, where the company is based.
S18 Under that state's regulations, approval of a buyout requires the support of two-thirds of all shareholders -- not just those voting.

S19 Shortly after Clear Channel announced its first agreement with the buyout firms, at $37.60 a share in cash, several major shareholders, as well as proxy advisory firms, complained that the company was being sold too cheaply.
S20 The bidders raised their offer to $39, which Clear Channel accepted, but the offer again met resistance from investors.

S21 But after Clear Channel's initial rejection of the third buyout bid, the company received worried phone calls from scores of investors.

S22 Though some technical details remain unresolved, the deal is expected to go through.

S23 Clear Channel said it would postpone a vote on the deal, originally scheduled for a special meeting on May 22.
S24 The company will instead set a new record date and a new vote, which will probably take place within the next three months, pending the filing of amended registration materials with federal regulators.

