Clear Channel cautions on sale prospects

by Tristan O'Carroll Media Week 28-Mar-08, 16:59

LONDON - Clear Channel Communications has publicly admitted for the first time that its proposed $19.5 billion buyout by a group of private equity firms might not go through.

Under the terms of the original deal, agreed in November 2006, the acquisition was meant to be completed by 31 March.

However, in a filing with US regulators ahead of the opening of US stock markets today, Clear Channel warned that it cannot estimate a closing date for the transaction.

In a statement the company said: “The company continues to be ready, willing and able to consummate the merger under the merger agreement, which remains in effect. The company is unable, however, to estimate a closing date at this time and cautions the markets that a closing may not occur.”

It also conceded that bank representatives failed to attend a meeting yesterday that had been convened between Clear Channel and the private equity buyers, Bain Capital and Thomas H. Lee Partners.

According to reports, the banks could lose as much as $2.7 billion if the purchase goes through as loan prices have tumbled since they agreed to finance the transaction.

Today’s admission is the latest twist in the protracted sale of the company, which operates the Clear Channel Outdoor business in the UK. Yesterday, Clear Channel Communications secured a US court order against several banks to force them to provide funding for the deal.

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