This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Clear Channel Buyers Reject Arbitration Bid

Clear Channel (CCU - Get Report) traded higher after the two private-equity firms trying to acquire the media company rejected a bid by the financing banks for arbitration.

Bain Capital and Thomas H. Lee Partners are attempting to take Clear Channel private in a $19 billion deal, but the pact has been a tangled saga since it was signed in December 2006, with disputes arising about price, the sale of certain assets and financing arrangements.

"This proposal is yet another disingenuous attempt by the banks to avoid living up to their commitments," said a representative for the prospective buyers in an emailed statement. "The banks want to move this case into the back room because they fear that a public trial will clearly expose their misconduct."

The buyout firms added that they are ready to complete the deal on the initial terms made more than a year ago. The firms said a New York court hearing on April 24 will give them a further opportunity to reveal more concerns about the banks' thinking.

Citigroup (C - Get Report), Morgan Stanley (MS - Get Report), Wachovia (WB - Get Report), Credit Suisse (CS - Get Report), Deutsche Bank (DB - Get Report), and the Royal Bank of Scotland (RBS - Get Report) are in the syndicate.

Shares of Clear Channel were rising $1.50, or 5.3%, to $29.99, but are more than 20% below the planned $39.20 buyout price.

Earlier this month, a federal judge ordered a Texas court to again hear the case between the buyout firms and the six banks. The banks involved in the financing of the deal had lobbied to have the suit moved from the Texas district court to a federal court in hopes of finding a friendlier judge.

Before that, Bain and Thomas H. Lee won a temporary restraining order against the banks after a Texas judge ruled Clear Channel would face irreparable damage if funding was refused. Despite fears the banks will wiggle their way out of the financing, the private-equity firms insist they will press on with the deal.

In late March, Clear Channel's merger partners filed breach-of-contract suits against the banks. The firms claim the banks have made changes to their initial contract that tighten credit restrictions and could eventually cause Clear Channel to go into default. Clear Channel has joined the firms as a plaintiff in one of the suits.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CCU $21.93 -1.40%
C $44.27 -2.90%
CS $14.24 -2.20%
DB $17.15 -1.10%
WB $23.21 2.20%


Chart of I:DJI
DOW 17,657.26 -93.65 -0.53%
S&P 500 2,050.44 -12.93 -0.63%
NASDAQ 4,727.6560 -35.5680 -0.75%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs