Investors and analysts have raised questions about unusual movements in Clear Channel Outdoor’s share price aheadof its $1.25bn private offering of senior notes that financed a special cash dividend two weeks ago.

Shares of the advertising company soared 11 per cent onFebruary 27, despite a flat broader market. Analysts could find no reason for the surge. After the close of trade, Clear Channel Outdoor announced the private offering and the dividend of about $3.50 a share.

“Clearly, it got out,“ said Brett Harriss, vice-president at Gabelli & Co, an asset management firm that together with its parent, Gamco Asset Management, owns about 6 per cent of the company’s publicly traded shares. “The stock was up sharply on no news and we didn’t know why.”

The timing of the stock’s performance, just before the dividend announcement, raises questions as to whether some people knew the news was coming and traded on non-public information. The concerns come amid intensifying investigations by the Federal Bureau of Investigation, US prosecutors and the Securities and Exchange Commission into insider trading on Wall Street. The SEC declined to comment.

James Dix, analyst at Wedbush Securities, who also tracks the stock, said: “Clients were asking what was up that day. It’s not a stock that’s heavily traded.” On February 27, the stock traded more than three times the daily average over the past year.

Two days later Clear Channel Outdoor announced it had priced the deal and nearly doubled the size of the private offering to $2.2bn and raised the dividend to $6.08 a share.

Clear Channel Communications, the media group owned by private equity firms Thomas H Lee Partners and Bain Capital, will be the main beneficiary of the dividend because it owns 89 per cent of Clear Channel Outdoor. The remaining 11 per cent of the stock is publicly traded.

Clear Channel Communications will use the money to pay down part of its large debt pile, an amount that threatens to make the two private equity firms’ $18bn investment in the company one of the least successful buyouts in recent times. Both firms declined to comment.

Wendy Goldberg, a spokeswoman for Clear Channel Outdoor and its parent, said it had no evidence that news of the private placement and dividend was leaked before the initial announcement, and that it had not received any requests for documents from the SEC regarding trading of its stock on that day.

The seven banks that worked with Clear Channel Outdoor to place the notes were Goldman Sachs, Citigroup, Credit Suisse, Deutsche Bank, Morgan Stanley, Wells Fargo and RBS. All declined to comment.

Clear Channel Outdoor is already under fire from minority investors over its transfers of money to Clear Channel Communications. Clear Channel Outdoor has lent at least $656m to its parent through a “corporate services agreement” since it was established in 2005.

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