Clear Channel suitors reject offer by banks

The latest skirmishes be­tween the banks and potential buyers of Clear Channel are raising expectations that the lenders will have to come up with $22bn in debt financing for the buy-out. There are two parallel legal cases stemming from the November 2006 deal under which Bain Capital and Thomas H Lee & Partners agreed to buy the Texas company, which owns radio stations and outdoor advertising sites. One, filed in New York by the private equity firms, would compel the banks to make good on their agreements to fund the deal. Clear Channel filed the other in its home state, alleging that the banks acted improperly and asking for damages of $26bn. The banks offered to settle their legal disputes with the buyers on Tuesday through binding arbitration ­ an offer that the buy-out firms spurned. Wall Street and hedge fund traders betting on whether a deal gets done interpreted the banks’ offer as a sign of weakness.
http://www.ft.com/cms/s/fe01bd14-10c1-11dd-b8d6-0000779fd2ac.html
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