Breaking News: Clear Channel

After talking to sources close to the sponsor CNBC’s Erin Burnett reveals that private equity still wants to get the Clear Channel deal done. Find out what’s the sticking point.

Earlier today CNBC reported that the $19.5 billion sale of the radio broadcaster Clear Channel Communicationsto two private equity firms appeared to be in jeopardy.

This time, however, instead of the buyers balking, the banks that had agreed to finance the deal have become apprehensive. Clear Channel Communications and the private equity buyers may go to court to try to force the banks to complete the buyout, according to people briefed on the negotiations, who were given anonymity because they were not authorized to discuss the deal.

The legal threat is the latest indication that the banks have become reluctant to put up the money for the sale, these people said. Earlier, the banks proposed that the buyers — Bain Capital and Thomas H. Lee Partners — put down more cash and agree to stricter repayment terms. The buyout firms have refused.

After talking to sources close to the sponsor CNBC’s Erin Burnett reveals that the private equity buyers still want to get the deal done, but that the banks tried to change the terms of the deal. As a result they’re suing for breach of contract. But the important thing to remember is that they still want to get the deal done, she emphasizes.

The banks involved here are Deutsche Bank (DB), Wachovia (WB), Royal Bank of Scotland (RBS), Citigroup (C) and Morgan Stanley (MS), Burnett adds. And what I’m hearing, she adds, is the troublemaker is Citigroup.

Read More:

> Clear Channel May Sue to Force Buyout

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