Report: Clear Channel may sue to force banks' hands

Clear Channel Communications and the private-equity firms that want to buy it may go to court to force lenders to complete the leveraged buyout, The New York Times said, citing people briefed on the talks.

Talks were continuing Tuesday night, but if the matter is not resolved, the U.S. radio operator and private-equity firms Thomas H. Lee Partners and Bain Capital might sue as soon as Wednesday, the newspaper said Wednesday. It said the people it cited as sources were given anonymity because they were not authorized to discuss the transaction.

Bank lenders that agreed to provide financing for the roughly $20 billion buyout include Citigroup, Credit Suisse Group, Deutsche Bank, Morgan Stanley, Royal Bank of Scotland Group, and Wachovia.

Banks are increasingly reluctant to provide financing, a person familiar with the situation told Reuters on Tuesday.

The private-equity firms agreed last year to buy Clear Channel for $39.20 per share. Clear Channel shares have traded well below that price amid concern that the leveraged buyout would join many others to fall apart since credit markets worldwide began to tighten last year.

Clear Channel shares closed Tuesday at $32.56.

Clear Channel and Thomas H. Lee Partners could not be reached overnight for comment. Bain Capital, Citigroup, Credit Suisse, Deutsche Bank, Morgan Stanley, and Wachovia did not immediately return calls for comment. RBS referred queries regarding the issue to Citigroup.

Story Copyright © 2008 Reuters Limited. All rights reserved.

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