Banks tried to reneg on the deal, Judge said "Uh-Uh!"
This could cost those banks $3 billion to $4 billion.
Citi, Morgan Stanley, Credit Suisse, RBS, Deutsche Bank, Wachovia on
the hook.
..
..
Clear Channel gets favorable deal ruling
Associated Press - March 27, 2008, 9:47AM
SAN ANTONIO -- A Texas judge issued a tem****ary restraining order
barring banks from interferring with or thwarting the closing of the
proposed $19.5 billion buyout of Clear Channel Communications Inc.,
the nation's largest radio station operator.
The order by Bexar County Judge John D. Gabriel was issued just hours
after Clear Channel and the private equity buyers, led by Bain Capital
and Thomas H. Lee Partners LLC, filed suit in Texas and New York to
force the banks to lend money promised in the deal first proposed 18
months ago.
They accused the banks of putting unreasonable terms on the loan in an
effort to bust the deal, violating the commitments they made earlier.
If the deal closes, the banks could take $3 billion to $4 billion in
writedowns. They are likely to have trouble reselling the debt in a
credit market that has seized up.
The Texas judge found there was evidence Clear Channel and the equity
firms will prevail in their case, and "harm is imminent and
immediate," justifying the restraining order.
San Antonio-based Clear Channel, which is also a major billboard
operator, hoped to complete the deal by Monday. Further delays trigger
fees or potentially destroy the buyout altogether.
"We are pleased that the banks and the purchasers will now be able to
move quickly to complete the loan do***ents and fund the merger,"
Clear Channel said in a statement.
The banks, which include Citigroup Inc., Morgan Stanley, Credit Suisse
Group, The Royal Bank of Scotland, Deutsche Bank AG and Wachovia
Corp., declined comment on the order through a Citigroup spokeswoman
Thursday.
The buyers have agreed to pay $39.20 a share for Clear Channel. The
company's shares price has fallen sharply on worries the deal will not
be completed, however.
In morning trading, Clear Channel shares rose $3.07, or 11.4 percent,
to $29.98 -- but that is still 24 percent below the offered price.
If the equity firms fail to close the deal, they're subject to $500
million to $600 million in breakup fees and have insisted they still
want to buy the radio and billboard giant.
Clear Channel has had success before in forcing a deal through legal
action. The $1.1 billion sale of its television group closed after the
company lowered the price by $100 million and sued Providence Equity
Partners, which had been having difficulty getting Wachovia to make
good on its earlier financing commitment.
http://www.chron.com/disp/story.mpl/ap/business/5652977.html
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