The routine European commission of the European Union (EU) that reviews mergers and takeovers and joint ventures will look into the $4.4 billion stock swap deal between Clear Channel Communications and SFX Entertainment.
Company sources indicate that the commission has "a calendar month after a deal has been filed to clear it or start a detailed, four-month probe."
The purchase of SFX by Clear Channel was filed with the EU commission on June 13, which establishes a July 14 deadline for the review. The commission can "extend its initial review by two weeks if it has identified competition problems and companies submit undertakings. Referral requests by EU national governments, usually in defense, utilities and media sectors, also trigger an initial two-week extension. The clock is re-started on incomplete filings when they are completed."
Other media or entertainment based reviews before the EU commission involve the deal between America Online and Time Warner to merge (deadline extended to June 19) and the proposed Time Warner/EMI Group joint venture which triggered a full probe by the commission on June 14.
As reported earlier, SFX develops and manages touring Broadway shows, and sells Broadway subscription series and individual productions in 55 markets. An integrated franchise that promotes and produces a broad variety of live entertainment events locally, regionally and nationally, SFX has 122 venues overall, and owns or operates venues in 31 of the top 50 domestic markets. Once Clear Channel finalizes two outstanding deals—its $14 billion deal to purchase AMFM and the subsequent $4.4 stock swap deal for SFX—the company will operate a total of 874 radio and 19 television stations in the United States and will have equity interests in over 240 radio stations around the world. In its other significant business, Clear Channel operates more than 550,000 outdoor advertising displays, including billboards, street furniture and transit panels. At press time, SFX was trading at 48 5/16, with a 52-week range of 25 - 51 5/8. Clear Channel was trading at 81 3/8, with a 52-week range 57 7/7 - 95 1/2.
-- By Murdoch McBride