Clear Channel Communications $19.5 billion sale is in jeopardy – and not because the buyers (Bain Capital and Thomas H. Lee Partners) want to pull out of the deal – but because the banks that were set to finance the deal don’t want to pay up.
With last minute negotiations between the lenders and the buyout firms failing, the privatization of the communications company has now gone to court.
Radio Ink reports Bain Capital and Lee Partners filed suits against Citigroup, Morgan Stanley, Credit Suisse, the Royal Bank of Scotland, Deutsche Bank, and Wachovia “to enforce binding commitments the banks made to provide debt financing for the private equity firms acquisition of Clear Channel Communications Inc.” Clear Channel joined the suit, filed in Texas.
A judge late last night ordered the banks to fund the Clear Channel deal. In a company statement, Clear Channel says the judge found “that irreparable harm would result if the Banks were not immediately enjoined from tortiously interfering with the Merger Agreement,” and that the banks must not “interfere with or thwart consummation of the Merger Agreement.”
The lenders say they will “vigorously” contest the suits, claiming they have no merit.