Clear Channel buyout on the ropes


Clear Channel shares plunged in after-hours trading as the Wall Street Journal posted a story on its website that the private equity buyout was “near collapse.” After closing at 32.56, the stock fell to 27.50 by 4:40 pm ET.

According to the WSJ report, the mood darkened in recent days as the private equity firms, Thomas H. Lee Partners and Bain Capital, worked on details of the credit agreement with their bankers. The lending group for the 26.7 billion cash and debt deal was Citigroup, Morgan Stanley, Deutsche Bank, Credit Suisse, RBS and Wachovia. T.H. Lee’s Scott Sperling insisted last week in a CNBC interview that the buyers had binding commitments from the banks, but it appears the devil is in the details. According to one source quoted by the WSJ, “no one wants to do this deal except for the seller.”

RBR/TVBR observation: The long roller coaster ride for Clear Channel employees is not over yet. But what are they supposed to do while this battle rages behind closed doors? The company went into a holding pattern at the beginning of the year, with Clear Channel Radio CEO John Hogan calling a halt to virtually all hiring, promotional spending or any spending that could be delayed. Now it looks like that state of limbo is going to continue into Q2. Along with the radio stations, folks at Katz, RCS, Inside Radio and the other businesses that Clear Channel owns don’t know how to plan for the future. What’s that going to do to morale?  (Reported First by RBR, the Hogan memo 01/28/08 TVBR #25)

RBR note: As of last night, our ongoing website poll revealed that readers anticipated the Clear Channel buyout closing in May. If you didn’t get your vote in, nows your chance. Lets see if the opinions have changed.

Poll Question: When will the Clear Channel buyout close? Vote on the hompage.