Status Report: Clear Channel - Bain Capital Partners/THL

According to various reports, Clear Channel (CCU) has offered to lower its sale price approximately $100 million for the 56 television stations planned to be divested in association with the Bain Capital transaction. As of this entry, none of the reports have been confirmed by CCU or Providence Equity Partners.

However, as also reported over the last few days, Wachovia has filed a lawsuit against Providence with the intent of forcing the company to complete the sale transaction under the original terms.

This is obviously becoming a more and more convoluted situation with respect to the primary CCU-Bain transaction, but the events seem to indicate determined motivation by CCU to resolve the primary divestiture issue as quickly as possible. Wachovia is understandably attempting to protect its position, so its legal action is somewhat routine. Given that the overall value of the transaction and the proposed divestitures, it should not be terribly difficult to Wachovia, and/or other financing interests, to be appeased via some sort of negotiated settlement, if that indeed becomes necessary.

However, while it remains expected that this mess will eventually be resolved, a first-quarter close continues to be compromised significantly by these events. Again, it would not be at all surprising if the close of the CCU-Bain deal slipped into the early second quarter of this year.

Disclosure: We have no positions of any kind, in any security. We are a completely neutral source of research and analysis.

Comments

[Radiorich]

This article is totally wrong...its 56 TV stations NOT radio......and Wachovia isnt suing to force the original deal...they want OUT of the deal

[CrossProfit]

M&A Researcher,
Perhaps it would be best for all if you stuck to research and analysis. Reporting news and updates apparently requires a different set of skills.

A few links to the items making the news would go a long way and correct all the inaccuracies in the above article. Radiorich mentioned a few.

See:
online.wsj.com/public/...
See:
dealbook.blogs.nytimes.../
See:
blogs.wsj.com/deals/20.../

CrossProfit

[David V.]

According to www.madmergers.com CCU is trading at a 17.30% discount. That is a 188% annualized return if the deal closes on 3/31/08. You can view all the merger arbitrage returns for all pending stock mergers for free at www.madmergers.com.