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CUSIP No. 18451C109
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SCHEDULE 13D
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Page
9
of 13
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Item 1.
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Security and Issuer.
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This Amendment No. 5 (this
Amendment
) to Schedule 13D amends and supplements the Schedule 13D filed with the Securities
and Exchange Commission (the
Commission
) on April 14, 2015 by the Reporting Persons named therein, as amended by Amendment No. 1 filed with the Commission on December 10, 2015, Amendment No. 2 filed with the
Commission on March 15, 2017, Amendment No. 3 filed with the Commission on December 11, 2017 and Amendment No. 4 filed with the Commission on March 19, 2018 (the
Schedule 13D
). Unless set forth below, all
previous Items set forth in the Schedule 13D remain unchanged. Capitalized terms used herein and not defined have the meanings given to them in the Schedule 13D, as amended to the date hereof.
This Amendment is being filed to supplement and amend the prior disclosure by the Reporting Persons regarding their plans or proposals with
respect to certain securities of Clear Channel Outdoor Holdings, Inc. (the
Issuer
) held by certain of the Reporting Persons.
Item 4.
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Purpose of the Transaction.
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Item 4 of the Schedule 13D is hereby amended and restated in its entirety as set forth below:
Settlement Agreement
On December 16, 2018, the Issuer, GAMCO Asset Management Inc. (
GAMCO
), Norfolk County Retirement System
(
Norfolk
), Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P. (together, the
Sponsor Entities
), iHeartMedia, Inc., the indirect parent of the Issuer (
iHeartMedia
) and certain of its
debtor affiliates in the iHeartMedia Chapter 11 cases (the
Debtors
), and the members of the Issuers board of directors (the
Delaware Individual Defendants
), through their respective counsel, entered into a
settlement agreement (the
Settlement Agreement
) that embodies the terms of (i) a global settlement of all direct or derivative claims by or on behalf of GAMCO and Norfolk, both individually and on behalf of the putative class
of public shareholders of the Issuer, against the Delaware Individual Defendants, the Sponsor Entities, iHeartCommunications, iHeartMedia, the Issuer and the Debtors, including the derivative lawsuit in the Court of Chancery of the State of
Delaware, captioned Norfolk County Retirement System, v. iHeartMedia, Inc., et al., C.A. No.
2017-0930-JRS
(the
Norfolk Action
) and the putative class action lawsuit in the Court of Chancery
of the State of Delaware, captioned GAMCO Asset Management, Inc. v. Hendrix, et al., C.A. No.
2018-0633-JRS
(together with the Norfolk Action, the
Actions
), and (ii) the separation of
the Issuer from iHeartMedia (the
Separation
) in accordance with the plan of reorganization (the
iHeartMedia Plan of Reorganization
) filed by iHeartMedia with the United States Bankruptcy Court for the Southern
District of Texas (the
Bankruptcy Court
) pursuant to Chapter 11 of the Bankruptcy Code.
The Settlement Agreement
contemplates that upon the separation of the Issuer from iHeartMedia, (i) the cash sweep arrangement under the existing corporate services agreement (the
Corporate Services Agreement
) between the Issuer and
iHeartCommunications will terminate, (ii) any agreements or licenses requiring royalty payments to iHeartMedia and its debtor affiliates by the Issuer for trademarks or other intellectual property will terminate and (iii) a new transition
services agreement will supersede and replace the existing Corporate Services Agreement. The Debtors agreed to waive (i) the
set-off
for the value of the intellectual property transferred, including
royalties and (ii) the repayment of the post-petition intercompany balance outstanding in favor of the Debtors as of December 31, 2018. In addition, the Settlement Agreement provides that after the Separation, (i) iHeartCommunications
will provide an unsecured revolving line of credit in an aggregate amount not to exceed $200 million to the Issuer (or its successor) for a period of no more than three years following the effective date of the iHeartMedia Plan of
Reorganization (the
iHeartCommunications Line of Credit
), (ii) iHeartMedia will indemnify the Issuer for 50% of certain tax liabilities imposed on the Issuer in connection with the Separation on or prior to the third anniversary
of the Separation in excess of $5.0 million, with iHeartMedias aggregate liability limited to $15.0 million, and (iii) iHeartMedia will reimburse the Issuer for
one-third
of potential
costs relating to certain leases between the Issuer and third parties in excess of $10.0 million of such costs up to the first $35.0 million of such costs such that iHeartMedia will not bear more than $8.33 million of such costs. The
parties agreed that the Issuer will recover 14.4% in cash on its allowed claim of $1,031,721,306 under the intercompany note owed by iHeartCommunications to the Issuer, and to mutual releases, including a release of all claims that have been
asserted, could have been asserted or ever could be asserted with respect to iHeartMedias Chapter 11 cases and the Actions.
The
Settlement Agreement contemplates that, upon the effective date of the iHeartMedia Plan or Reorganization, the Issuer will separate from iHeartMedia pursuant to the terms of terms of the iHeartMedia Plan of Reorganization, the settlement term sheet
dated November 22, 2018 and the forms of separation documents attached as exhibits to the Settlement Agreement, including forms of a settlement and separation agreement, a transition services agreement, a tax matters agreement, a merger
agreement (the
Merger Agreement
) providing for the merger (the
Merger
) of the Issuer