BCE says buyout on track despite Clear Channel woes

TORONTO (Reuters) - The C$34.8 billion ($34.1 billion) buyout of BCE Inc (BCE.TO) remains on track, a company spokesman said on Tuesday, even as some of the banks financing the acquisition appeared ready to scuttle another deal.

The buyout of BCE -- Canada's biggest telecom company -- by a consortium led by the Ontario Teachers' Pension Plan is still expected to close by the end of the second quarter, Mark Langton said.

Teachers' was not immediately available for comment.

Meanwhile, talks over the US$20 billion leveraged buyout of U.S. radio operator Clear Channel Communications Inc (CCU.N) are in trouble, with the banks financing the deal unwilling to take a mark-to-market loss, a source familiar with the situation said on Tuesday.

Several of the banks involved in financing the Clear Channel deal -- Citigroup Inc (C.N), Deutsche Bank AG (DBKGn.DE) and Royal Bank of Scotland Group Plc (RBS.L) -- are also providing funding for the purchase of BCE.

BCE's stock has traded well below the buyout price of C$42.75 a share offered by Teachers' and its U.S. private equity partners amid investor worries that the deal could be repriced, delayed or abandoned altogether.

Analysts have said that a major risk facing the takeover is the ongoing turbulence in world credit markets, which makes it difficult for the banks involved to on-sell the funding to other investors and lower their risk.

BCE shares closed 51 Canadian cents lower at C$36.69 on the Toronto Stock Exchange.

($1=$1.02 Canadian)

(Reporting by Wojtek Dabrowski and Nicole Mordant; editing by Rob Wilson)