UPDATE 2-Clear Channel shareholders OK $17.9 bln buyout

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By Jim Forsyth

SAN ANTONIO, Texas, July 24 (Reuters) - Clear Channel Communications Inc (CCU.N: Quote, Profile, Research, Stock Buzz) shareholders on Thursday approved a $17.9 billion takeover by private equity funds Thomas H. Lee Partners THL.UL and Bain Capital, ending a 20-month effort to take the radio and billboard operator private.

Clear Channel said that about 97 percent of the shares voted were cast in favor of the deal. The parties plan to consummate the merger on Wednesday, July 30.

The approval caps high-level negotiations and legal battles in two states, after six banks, which agreed in 2006 to fund the deal, attempted to back out against the headwind of the slumping stock market and dwindling capital markets.

In March, Thomas H. Lee Partners and Bain filed complaints in New York and Texas against the six Wall Street banks -- Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz), Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz), Credit Suisse Group (CSGN.VX: Quote, Profile, Research, Stock Buzz), Royal Bank of Scotland Group Plc (RBS.L: Quote, Profile, Research, Stock Buzz), Deutsche Bank AG (DBKGn.DE: Quote, Profile, Research, Stock Buzz) and Wachovia Corp (WB.N: Quote, Profile, Research, Stock Buzz) -- to enforce their agreement to fund the buyout.

In May, the bank syndicate, private equity buyers and Clear Channel struck a deal to lower the deal's price and settle litigation between the parties.

The deal approved by shareholders, provided them with $36 a share, down from a $39.20 previously offered.

Central to the dispute was the hit the banks would take in funding the deal, given the deteriorated lending conditions.