Clear Channel buyers reject bank plan

by Tristan O'Carroll Media Week 24-Apr-08, 13:15

LONDON - The two private equity firms attempting to buy Clear Channel Communications for $19.5bn, Bain Capital and Thomas H Lee Partners, have rejected a proposal to resolve their dispute with the deal's lenders through arbitration.

Under the terms of the original deal, agreed in November 2006, the acquisition was meant to be completed by 31 March this year. However, the deal has been on ice for several weeks amid a series of court hearings, with Bain and Lee accusing the banks of reneging on their promise to fund the deal.

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Clear Channel buyers reject bank plan
by Tristan O'Carroll Media Week 24-Apr-08, 13:15

LONDON - The two private equity firms attempting to buy Clear Channel Communications for $19.5bn, Bain Capital and Thomas H Lee Partners, have rejected a proposal to resolve their dispute with the deal's lenders through arbitration.

Under the terms of the original deal, agreed in November 2006, the acquisition was meant to be completed by 31 March this year. However, the deal has been on ice for several weeks amid a series of court hearings, with Bain and Lee accusing the banks of reneging on their promise to fund the deal.

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The global credit crunch means the banks stand to lose as much as $2.7bn if they eventually finance the transaction. The banks have since countersued, seeking to limit this to several hundred million dollars.

The six banks funding the planned deal proposed this week to appoint a neutral party to set final terms of the agreement, which would result in its UK arm Clear Channel Outdoor changing hands.

But the private equity firms rejected the plan, stating they would prefer to pursue their cases in court.

The bank group said in a statement: "Bain and [Thomas H Lee Partners] are placing the transaction at risk and have demonstrated once again that they have no interest in seeing this transaction close."

Last week, Clear Channel Communications secured a temporary US court ruling preventing six banks from pulling out of the deal.