So the private equity firms, Clear Channel (CCU), and the syndicate have reached an agreement. It also looks like the large shareholders are going to swallow a revised offer of $36 per share rather than $39.50.
If the agreement goes official, the banks are the obvious big winners since they had the most to lose. The private equity firms get the deal done but with higher interest rates on the debt, which may prove untenable if Clear Channel’s performance deteriorates with the slowing economy.
Clear Channel shareholders also win here since the deal will get done, albeit at a lower price.
The Prince would have loved to see this one go to court, but basically the settlement maintains the status quo. If the credit markets tumble then banks can continue to count on having the ability to negotiate on committed financings to ease the pain.
Private equity buyers will probably seek tougher terms in the future given this reality.