Clear Channel shares fall on buyout worries

By Megan Davies

NEW YORK (Reuters) - Shares of U.S. radio operator Clear Channel Communications Inc (CCU.N: Quote, Profile, Research, Stock Buzz) fell again on Tuesday as the market continued to worry about whether a buyout deal would go through.

The stock fell 4.5 percent to $30.02, adding to a 7 percent fall on Monday. That is significantly below the $39.20 a share, or $20 billion deal, it struck in 2007 to be bought by private equity firms Bain Capital Partners and Thomas H. Lee Partners.

At a conference this morning, Anthony DiNovi, co-president of Thomas H. Lee Partners, sidestepped a question about Clear Channel and the buyout industry in a panel discussion, answering in general about his predictions for buyouts.

One trader, who declined to be named, said that not speaking out in support of the deal contributed to concerns. DiNovi was also quoted by Dow Jones, which hosted the conference, as saying nothing should be read into his "no comments."

On Monday, Alliance Data Systems Corp (ADS.N: Quote, Profile, Research, Stock Buzz), a credit card transaction processor, became the latest leveraged buyout to encounter turmoil, as it said a $6.76 billion buyout by private equity firm Blackstone Group LP (BX.N: Quote, Profile, Research, Stock Buzz) was in jeopardy for regulatory reasons.

"I think on the heels of the Alliance Data (news) it probably made people a bit nervous (about Clear Channel)," said David Bank, RBC Capital Markets analyst, talking on Monday. "You can't know the answer to the question unless you happen to be sitting with Bain and T.H. Lee."

He noted on Monday that public comments from the private equity buyers had been positive.

DiNovi said at the conference that he thought 2008 would be a challenging year, with the backlog of deal financing weighing on the market.

(Reporting by Megan Davies; Editing by Tim Dobbyn)