Clear Channel, Suitors, Lenders Prepare Way for Merger

On Tuesday, U.S. radio operator Clear Channel and private equity outfits, Thomas H. Lee Partners and Bain Capital, agreed to a lower sale price of $17.9 billion or $36.00 per share of the radio company. The companies have agreed to pursue a third amendment to the deal.

The settlement puts the deal back on track at a lower per-share buy-out price. And now the newly amended deal must again receive shareholder approval.

Clear Channel and the buyout firms have accused six banks of failing to honor their commitments to finance the acquisition, which was first announced in November 2006. In March, the company and the equity firms filed lawsuits in Texas and New York to force the banks to fund the agreement. The lenders include Citigroup, Deutsche Bank, Morgan Stanley, Credit Suisse, Royal Bank of Scotland and Wachovia

The company, which owns eight Cincinnati radio stations, and the buyout firms have accused six banks of failing to honor their commitments to finance the acquisition, which was first announced in November 2006. Clear Channel and the equity firms filed lawsuits earlier in March in Texas and New York to force the banks to fund the agreement.

As part of the settlement agreement, the banks have entered into fully-negotiated and documented definitive agreements to provide long-term financing to Clear Channel. All parties will also file papers necessary to terminate litigation related to the acquisition.