UPDATE 2-Clear Channel shareholders approve buyout

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By Megan Davies

NEW YORK, Sept 25 (Reuters) - U.S. radio operator Clear Channel Communications Inc (CCU.N: Quote, Profile, Research, Stock Buzz) said on Tuesday that shareholders approved a $39.20-a-share buyout offer from private equity firms Bain Capital Partners and Thomas H. Lee Partners, worth nearly $20 billion.

The company said that 73 percent of the total shares outstanding were voted in favor of the deal.

The deal faced a difficult hurdle because, under Texas law, holders of at least two-thirds of the San Antonio-based company's shares had to vote in favor of the transaction. Shareholders who failed to vote were counted as voting against the sale.

The initial $37.60 bid ran into some opposition last year. But some influential shareholders began supporting the deal after the bidders raised the price and offered the option to investors to take an ongoing stake in the company following the deal, known as "stub equity."

In addition, proxy advisory service Institutional Shareholder Services (ISS) reversed its opposition to the deal last week. Part of the reason for the reversal was the fall-off in leveraged buyouts amid turmoil in the debt markets, making it less likely such a deal could be struck again.

In an e-mail to employees after the vote result was announced, Clear Channel Chief Executive Mark Mays wrote that the company's next focus was getting the merger closed. The deal is awaiting approval from the Federal Communications Commission and the Department of Justice.

Those will "hopefully be granted in the next few months, putting the most likely merger completion date in December, although it could be somewhat before or after that timeframe," wrote Mays in the e-mail.