Clear Channel says wins ruling on $20 bln buyout

NEW YORK (Reuters) - Clear Channel Communications Inc (CCU.N: Quote, Profile, Research) on Thursday said it won a temporary order from a Texas judge that prevents banks from reneging on their commitments to fund the $20 billion buyout of the radio operator.

The decision does not guarantee the closely watched buyout will go through but does prevent it from falling apart for now, analysts said. Clear Channel shares rose 10 percent to $29.60 but are still significantly below the $39.20 that private equity firms Bain Capital Partners LLC and Thomas H Lee Partners LP agreed to pay.

Six banks led by Citigroup Inc (C.N: Quote, Profile, Research) were to provide more than $22 billion of financing, and earn more than $400 million in fees, for the buyout.

The private equity firms filed lawsuits in New York and Texas on Wednesday, accusing the banks of backing out of their commitments after capital markets deteriorated. Clear Channel joined in the Texas lawsuit.

The banks on Thursday filed to move the Texas case from Bexar County court to a federal court in the state, a copy of the filing, in the Western District of Texas, shows.

The filing claims that Clear Channel's buyers are prohibited from suing the banks in any state other than New York relating to the deal.

It was unclear from the filing whether the banks intended to move the case to a New York federal court after removal to Texas federal court. Lawyers from Davis Polk, who are representing the banks, were not immediately available for comment.

One lawyer not representing either side who declined to be named said in the process of removal of a case from state to federal court, filing has to be made within the same state.

The banking group faced losses of about $3 billion to $4 billion on Clear Channel, a person familiar with the situation told Reuters on Wednesday.