Saturday, October 03, 2015
Current Weather
Loading Current Weather....
Published: Monday, 5/12/2008

Clear Channel, banks, buyers in settlement talks


SAN ANTONIO, Tex. Clear Channel Communications Inc. and its prospective buyers are in talks with banks to try to settle a dispute over whether the banks must fund promised loans for the $19.5 billion takeover, the radio and outdoor advertising company said Monday.

Shares of Clear Channel were up $2.80, or 9.3 percent, to $32.80 in late afternoon trading Monday.

Clear Channel and its private equity buyers, Bain Capital and Thomas H. Lee Partners, sued a consortium of six banks, accusing them of trying to undermine the deal by changing the terms.

That lawsuit is pending in a Texas court, while the equity firms have a separate suit pending against the banks in New York court.

Pre-trial hearings in San Antonio and the trial in New York were delayed Monday.

Clear Channel confirmed the postponement was designed to allow the parties to continue settlement talks, though it would not comment on the terms of a possible settlement or whether one was likely.

The equity firms have been struggling to close the proposed deal, at $39.20 per share, as the credit markets have faltered and the share price has declined on fears the deal wouldn't close.

A busted deal would subject the private equity firms to roughly $500 million in fees. But funding the loan at the original terms could cost the banks $3 billion to $4 billion in write-downs.

The sharp increase in share price began with as The Wall Street Journal reported about a possible settlement.

Recommended for You

Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. If a comment violates these standards or our privacy statement or visitor's agreement, click the "X" in the upper right corner of the comment box to report abuse. To post comments, you must be a Facebook member. To find out more, please visit the FAQ.