Corporate & Securities Law

And the Clear Channel litigation will not continue….

The news just broke that the Clear Channel acquisition litigation ? both in Texas and New York - is on the road to being settled, with the parties having penned a new set of agreements tonight, providing for the acquisition of Clear Channel by Thomas H. Lee Partners and Bain Capital, with the Clear Channel shareholders getting $36 per share (or the option for equity in the post-acquisition entity). 

The Clear Channel press release provides that:

The banks, the private equity investors, Clear Channel, certain shareholders, and Bank of New York (serving as escrow agent) have entered into an Escrow Agreement pursuant to which the private equity investors and the banks [a bank syndicate consisting of Citigroup, Deutsche Bank, Morgan Stanley, Credit Suisse, Royal Bank of Scotland and Wachovia] have agreed to fund into escrow the total amount of their respective equity and debt obligations, in a combination of cash and/or letters of credit, within ten and seven business days, respectively.  Certain shareholders also have agreed to deposit into escrow securities of Clear Channel that these parties have agreed to exchange for Class A common stock of CC Media Holdings.  Following deposit of funds and other property into escrow, each party to the merger related litigation pending in New York and Texas will file all papers necessary to terminate the litigation, with prejudice.

Thus ends the long drama of the seller chasing the buyer chasing the lender.  It appears we will walk away not having learned how a court in New York would have dealt with the specific performance aspect of forcing lenders to finance a private equity dea.  This assumes, of course, that the Clear Channel revised acquisition ultimately closes by the third quarter of 2008, as tonight?s press release promises.  Stay tuned.

Full post as published by Truth on the Market on May 14, 2008 (boomark / email).