Clear Channel Communications Inc., San Antonio, warned today that the $26 billion leveraged buyout of the company by private equity firms Thomas H. Lee Partners and Bain Capital Partners may not close because six banks had not provided the required financing, according to an SEC filing today. The buyout was to close today.
On March 26, a Texas state court in Bexar County awarded Clear Channel and the two private equity firms a temporary restraining order requiring the banks to fulfill their obligations under the original financing agreement until an April 8 preliminary injunction hearing that will determine whether the injunction will last until trial. Also on March 26, Clear Channel and the two private equity firms filed a suit against the banks in New York State Supreme Court.
The banks Citigroup, Morgan Stanley, Credit Suisse, Royal Bank of Scotland Group, Deutsche Bank and Wachovia said in a joint statement the suits are without merit and the banks will contest them vigorously.