Clear Channel says buyout may collapse

NEW YORK (Reuters) - Radio broadcaster Clear Channel Communications Inc (CCU.N: Quote, Profile, Research) said on Friday its pending $20 billion buyout may collapse, as the banks had failed to provide funding for the deal under previously agreed terms.

In a filing with the Securities and Exchange Commission, Clear Channel said it had agreed with buyout firms Thomas H. Lee Partners LP and Bain Capital Partners LLC that all closing conditions for the deal have been satisfied.

"The company continues to be ready, willing and able to consummate the merger under the merger agreement, which remains in effect," Clear Channel said in the filing. "The company is unable, however, to estimate a closing date at this time and cautions the markets that a closing may not occur," it added.

The deal had been expected to close March 31.

The comments are expected following events this week. The deal on Wednesday descended into litigation, with Clear Channel and the buyout firms suing the banks, alleging they balked at their obligation to fund the deal and hadn't stuck to previously agreed terms.

A spokeswoman for the banks said at the time the lawsuits were filed that they were without merit and would be contested vigorously.

Clear Channel's shares fell 5 percent to $28.09 on Friday on the New York Stock Exchange -- significantly below the $39.20 a share offered.

In a research note Friday, Miller Tabak analyst David Joyce wrote that Clear Channel is in "fine financial shape and is outperforming a weak radio industry."

The company would still be a desirable acquisition candidate if the deal collapses, or it could operate equally as well on its own, he wrote. Joyce has a price target of $39.20 on the shares.