Clear Channel Deal STILL Difficult to Close…
An update to the saga of the leverage buyout of Clear Channel and it’s buyers, lead by Thomas H Lee Partners, LP, and Bain Capital LLC …
The buyers have concluded that their bankers are trying to back out. Bankers have concluded that the buyers aren’t acting in good faith in negotiating the terms of the loan agreement. Sounds a little like Hillary and Barak, eh?
The unclosed deal, reaching its two year anniversary on November 26, 2006, was valued at $26.7 billion (current estimates are about $19.5 billion), of which the banks agreed to finance up to $22 billion. The offer price was $37.60/share in cash. Clear Channel’s stock closed at 29.74 on April 22, 2008.
The bankers are a sextuplet including Wachovia, Citigroup, Deutsche Bank, Morgan Stanley, Credit Suisse, Royal Bank of
Their concern is that there is a major credit crunch that’s making reselling of the loans to the secondary market extremely difficult (and difficult for many private equity deals). The banks are skittish given the numerous write-downs that some have had…like Citi’s $18 billion write-down in the 4th quarter of 2007.
