The ongoing sale of Clear Channel to private equity firms is on the verge of collapse due to current US market conditions, according to The Wall Street Journal (WSJ). Thomas H. Lee Partners and Bain Capital, which were last month granted federal approval for their USD19bn buy-out, have reportedly failed to reach terms with the banks that are due to finance the deal. News of the stalled talks caused Clear Channel shares to plummet overnight.
Shares dropped 5.5% to USD32.56 at the end of trading on Tue. This dropped a further 21% overnight with after-hours trading placing the share price at USD25.82.
Officially, Clear Channel says it expects the deal to close by the end of the quarter. However, WSJ quotes people close to the deal who say no credit agreement is in place and that unless there is a last-minute resolution, the deal cannot go through. If the deal collapses, under the original terms, the buyers are due to pay a break-up fee of roughly USD500m.