Clear Channel Communications sale in doubt

by Isabella Piasecka Media Week 26-Mar-08, 13:10

LONDON - Contrary to claims by US private equity firm Thomas H Lee last week, the planned buyout of Clear Channel Communications could fall through unless banks backing the deal can agree financing terms.

Last week, Richard Bressler, managing director at Thomas H Lee Partners, insisted the deal is on track, telling a US House of Representatives hearing: “We continue to be confident that the Clear Channel deal is going to get done.”

However, reports now suggest banks including Citigroup and Royal Bank of Scotland are struggling to raise the necessary $20bn(£10bn) backing in the wake of continued turmoil in global credit markets.

If the proposed private equity buyers, Thomas H. Lee and Bain Capital Partners, walk away from the deal, Clear Channel could sue the firms for breach of contract and ask a court to force them to conclude it.

In a statement on Tuesday night, Clear Channel reiterated that it expected the deal to close by the end of the current quarter.

Clear Channel first agreed its sale to a group of investors led by Thomas H Lee Partners and Bain Capital Partners in November 2006. The deal was approved by shareholders last September.

The parties have set themselves a deadline of 12 June to complete the deal, which has already secured relevant regulatory approvals.