Financial Market Turmoil Could Torpedo Clear Channel Sale

27 March 2008

NEW YORK; Word within the canyons of Wall Street is that the proposed $19 billion (€12.18bn; £9.50bn) buyout of Clear Channel's radio business has reached stalemate due to the ongoing turmoil in the globe's financial markets.

Those close to the situation say that private equity firms and banks are eyeball-to-eyeball over the terms of the deal's financing.

The teetering deal has become a litmus test for the state of the US financial market, representing as it does a concordat struck when credit was readily available and inexpensive.

According to an insider, the private equity companies concerned –  Thomas H Lee and Bain Capital – are still in go-go mode and pressing the reluctant bankers to meet their commitments.

The latter, however, are demanding financial guarantees that the private equity firms are reluctant to give.

  • News Flash
    The private equity duo finally lost patience on Wednesday and filed lawsuits against Citigroup, Morgan Stanley, Credit Suisse, The Royal Bank of Scotland, Deutsche Bank and Wachovia in an attempt to force them to stump up the promised cash.
  • Data sourced from Financial Times; additional content by WARC staff