Billboard operator Clear Channel Outdoor has sold its businesses in Italy and Spain for a little over $80 million, two weeks after activist Legion Partners urged the company to speed up asset sales.
Clear Channel sold its Spanish and Italian operations to JCDecaux, the French outdoor advertising company mentioned by Legion in a recent letter calling for greater urgency in divestments and a potential sale of the whole of Clear Channel.
Legion reckoned Clear Channel’s stock could more than triple to $3.57 if the company transitioned to a U.S. pure play and reduced its leverage. That price tag assumed a valuation of 7.5x EBITDA for the company’s assets in Europe and Latin America. The JCDecaux deal implies a multiple of 7x segment adjusted EBITDA, based on the 12 months ended March 31.
“The sale of our businesses in Italy and Spain is another important step forward toward our goal of optimizing our portfolio in the best interests of our shareholders,” said Clear Channel CEO Scott Wells Tuesday. ‘‘The board continues its review of strategic alternatives for our other European businesses, and we remain focused on executing our strategic priorities in our America and Airports segments,” he added.
In its letter earlier in May, Legion warned Clear Channel about a potential push to refresh the board if it did not expedite the review process, which was announced in December 2021.
Clear Channel shares rose 5.5% to $1.35 each in after-hours trading Tuesday in New York.