Jan. 19 (Bloomberg) -- Fidelity Investments, the largest holder of Clear Channel Communications Inc., plans to oppose a $19 billion takeover offer for the company as too low, said a person with knowledge of the decision.

Buyout firms Thomas H. Lee Partners LP and Bain Capital Partners LLC agreed Nov. 16 to buy Clear Channel, the biggest U.S. radio broadcaster, for $37.60 a share. The world's largest mutual-fund manager, which held 11 percent of the stock as of Sept. 30, wants a higher price, said the person, who declined to be identified because Fidelity doesn't publicly discuss investments. The shares closed at $36.45 yesterday.

Clear Channel, founded in 1972 by friends Lowry Mays and Red McCombs, put itself up for sale in October after asset sales and stock buybacks failed to lift its stock price, which peaked at $91.40 in early 1999. The San Antonio-based company, which owns 1,150 radio stations, has been hurt by competition from satellite radio, the Internet and iPods.

``To feel comfortable supporting the buyout, the shareholders are looking for a sweetener,'' said Fred Moran, an analyst at Boca Raton, Florida-based Stanford Group, who has a ``hold'' rating on Clear Channel and doesn't own any shares. ``Whether Bain and Lee will consider doing so is a real question.''

Clear Channel ``doesn't comment on rumor or speculation,'' said company spokeswoman Michele Clarke. Vin Loporchio, a spokesman for Boston-based Fidelity, declined to comment, as did Thomas H. Lee spokesman Matt Benson, and Alex Stanton, a spokesman for Bain.

`In Jeopardy'

The Wall Street Journal reported yesterday that some of Clear Channel's largest investors were against terms of the deal.

Clear Channel went public in 1984 and is now run by Lowry's sons, Mark, the chief executive officer, and Randall, the chief financial officer. The company sold 10 percent of its outdoor- advertising unit, Clear Channel Outdoor Holdings Inc., to the public in 2005, and spun off its concert division, now Live Nation Inc. Clear Channel Outdoor has a market value of $10.3 billion.

The Mays own about 6 percent of the radio company and would continue to run it under the takeover agreement with Bain and Lee, which are both based in Boston.

The deal needs approval from two-thirds of outstanding shares, according to a regulatory filing. The companies plan to complete the transaction by the end of the year.

``If the shareholders push for too much, it could put the deal in jeopardy,'' Moran said.

Earlier Opposition

Fidelity disclosed in regulatory filings in August 2005 that it withheld votes in the re-election of the company's board. The decision was made after Clear Channel had renewed about $90 million in severance agreements for the Mays family. Fidelity owned 15.5 percent of Clear Channel at the time.

As part of the agreement with Bain and Lee, the Mays family agreed to a new employment contract that reduces the payments they could receive if they leave the company as a result of any buyout. Lowry Mays had stood to receive at least $23 million and Mark and Randall Mays more than $14 million each, according to a previous regulatory filing. Under the new contract, each will no longer receive options for 1 million shares if they leave.

The cost of a credit-default swap based on $10 million of Clear Channel debt fell to $215,287 yesterday from $221,845 on Jan. 17, according to data compiled by Bloomberg. That's the lowest since Oct. 26. The contracts are financial instruments based on corporate bonds and loans that are used to speculate on a company's ability to repay debt. A drop indicates improving credit quality.

To contact the reporter on this story: Danielle Kost in Boston at dkost1@bloomberg.net

Last Updated: January 19, 2007 13:17 EST