Banks want out of Clear Channel deal
TEXT OF STORY
Renita Jablonski: This morning, Clear Channel reports earnings. The nation’s largest owner of radio stations is in the midst of a messy $20 billion buyout by two private equity firms. Messy because the banks that were supposed to finance the deal now want to back out. Marketplace’s Dan Grech has more.
Dan Grech: Clear Channel first announced it would be taken private in a leveraged buyout back in November 2006. The deal was approved after a 10-month struggle over price with activist shareholders. Then the credit market tanked. Now the six banks that agreed to finance the deal, including Citigroup, Morgan Stanley and Wachovia want to pull out. Media analyst Joe Bonner is with Argus Research.
Joe Bonner: The shareholders took management to the wall on price, and then, in the meantime, the credit markets fell apart and the deal might just fall apart.
Clear Channel and the private equity firms that want to buy it have sued the banks to force the deal through. They’ll meet in court next week. In the meantime, Clear Channel’s 1,100 radio stations are losing ad revenue to new online competitors. The deadline to complete the deal is June 12.
I’m Dan Grech for Marketplace.
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