March 26, 2008 / 10:00 AM / 10 years ago

Clear Channel may sue to force banks' hands: report

NEW YORK (Reuters) - Clear Channel Communications Inc (CCU.N) and the private equity firms that want to buy it may go to court to force lenders to complete the leveraged buyout, the New York Times said, citing people briefed on the talks.

A view of the Clear Channel offices in Burbank, California March 24, 2008. The $20 billion leveraged buyout of U.S. radio operator Clear Channel Communications Inc was in jeopardy on Tuesday, with banks increasingly reluctant to provide financing, a source familiar with the situation said. REUTERS/Fred Prouser

Talks were continuing Tuesday night, but if the matter is not resolved, the U.S. radio operator and private equity firms Thomas H. Lee Partners and Bain Capital Partners LLC might sue as soon as Wednesday, the newspaper said on Wednesday. It said the people it cited as sources were given anonymity because they were not authorized to discuss the transaction.

Bank lenders that agreed to provide financing for the roughly $20 billion buyout include Citigroup Inc (C.N), Credit Suisse Group CSGN.VX, Deutsche Bank AG (DBKGn.DE), Morgan Stanley (MS.N), Royal Bank of Scotland Group Plc (RBS.L) and Wachovia Corp WB.N.

Banks are increasingly reluctant to provide financing, a person familiar with the situation told Reuters on Tuesday.

The private equity firms agreed last year to buy Clear Channel for $39.20 per share. Clear Channel shares have traded well below that price amid concern that the leveraged buyout would join many others to fall apart since credit markets worldwide began to tighten last year.

Clear Channel shares closed Tuesday at $32.56.

Clear Channel and Thomas H. Lee Partners could not be reached overnight for comment. Bain Capital, Citigroup, Credit Suisse, Deutsche Bank, Morgan Stanley and Wachovia did not immediately return calls for comment. RBS referred queries regarding the issue to Citigroup.

Reporting by Jonathan Stempel; Editing by Louise Ireland

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