Legal boost for Clear Channel deal

by Tristan O'Carroll Media Week 27-Mar-08, 15:19

LONDON - Clear Channel Communications has secured a US court order against several banks in an attempt to force them to provide funding for its US$19.4 billion buyout with two private-equity firms.

A judge in Texas ordered that the banks must not “interfere with or thwart consummation” of the planned deal.

The ruling is a boost for Clear Channel following days of speculation that the deal would collapse after private-equity firms Thomas H. Lee and Bain Capital Partners reportedly failed to secure finance from numerous banks.

Clear Channel said the judge supported its claim that “irreparable harm” would result if the deal did not go through.
The company said in a statement: “We are pleased that the banks and the purchasers will now be able to move quickly to complete the loan documents and fund the merger.”

On Wednesday, in lawsuits filed in Texas and New York, Clear Channel and its private-equity buyers, claimed the six banks were reneging on their original agreement to fund the deal.