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.
> Clear Channel May Sue to Force Buyout
Got something to say? Send us an e-mail at email@example.com and your comment might be posted on the Rapid Recap! Prefer to keep it between us? You can still send questions and comments to firstname.lastname@example.org.
Trader disclosure: On Mar.26, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (YHOO), (INTC), (EMC), (ATVI), (DIS); Najarian Owns (AAPL), (CSCO), (EMC), (MS), (MSFT), (NOK), (ORCL), (TSO), (XLF), (YHOO); Najarian Is Short (CAG); Najarian Owns (COP) Calls, (RMBS) Calls; Najarian Owns (MER) Puts; Najarian Owns (BSC) Calls; (CHK) Calls; Najarian Owned (RMBS) Calls On 1/30/08; Finerman Owns (GS); Finerman's Firm And Finerman Own (HD); Finerman's Firm Owns (CLWR), (MO), (MSFT), (SUN), (VLO), (WMT), (YHOO), (TSO), (BCE), (BJS); Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM), (COF), (GLD); Finerman's Firm And Finerman Own (KALU); Seymour Owns (AAPL), (CSCO), (INTC), (MER), (MSFT), (S), (TSO), (F), (HAL); Seygem Asset Management Owns Severstal, (TTM)