Clear Channel buyout in trouble
|
|
|
| Posted
:
Tue, 25 Mar 2008 22:09:00 GMT |
| By
:
Reuters |
| Category
:
US (Business) |
| News Alerts by
Email ( click
here ) |
|
US Business News |
Home
|
|
|
|
By Megan DaviesNEW YORK (Reuters) - The $20 billion leveraged buyout of U.S. radio operator Clear Channel Communications Inc was in jeopardy on Tuesday, with banks increasingly reluctant to provide financing, a source familiar with the situation said.The banks appear unwilling to account for any losses on the loans they agreed to make for the deal, the source said. But the final resolution is unclear, with the private equity buyers still wanting to do a deal, the source added.If the Clear Channel deal falls apart, it would be the latest in a series of leveraged buyouts that have failed since the credit crisis began last year.Clear Channel struck a deal last year to be bought by private equity firms Thomas H. Lee Partners and Bain Capital Partners LLC for $39.20 a share.Clear Channel shares plunged 21 percent to $25.70 after-hours on Tuesday after falling 5.6 percent in the regular session on the New York Stock Exchange, a sign the market felt the deal was set to die.Banks that agreed to finance the deal include Citigroup Inc, Morgan Stanley , Deutsche Bank AG and Credit Suisse Group .Danielle Romero-Apsilos, a spokeswoman for Citigroup, declined to comment. Spokespeople from Credit Suisse, Deutsche Bank, Morgan Stanley and Wachovia Corp referred questions to Citigroup. A spokesperson at Royal Bank of Scotland Group Plc was not immediately available for comment.A spokeswoman for Clear Channel said the company had no immediate comment.Banks have to record decreases in the market value of loans in their income statements in a process known as "marking to market." Any declines in the market value of these loans could cut into bank earnings and, in the worst case scenario, cut into capital levels.Banks are increasingly reluctant to take on credit risk because their balance sheets are strained by subprime mortgages, collateralized debt obligations and other forms of debt that are performing much worse than expected.(Additional reporting by Michele Gershberg and Dan Wilchins; Editing by Andre Grenon)
(c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
|
|
|
|
|
|
Related News
Five more US bank failures bring total for 2009 to 120
New York - Bank failures in the United States have risen to 120 this year as five more regional institutions were added to the list, the US agency that guarantees the safety of bank deposits said. United Commercial Bank in San Francisco with assets o...
US stocks climb slightly despite double-digit jobless rate
New York - US stocks posted mild gains Friday to end the week as investors shrugged off government figures that put the unemployment rate above 10 per cent. The Labour Department said the jobless rate hit 10.2 per cent in the month of October, the hi...
US joblessness hits 10.2 per cent, highest in 26 years - Summary
Washington - The US unemployment rate surged to 10.2 per cent in October, the highest in 26 years as another 190,000 people lost their jobs, the Labour Department reported Friday. The figure comes after a 9.8-per-cent jobless rate in September and wa...
US joblessness jumps to 10.2 per cent, highest since 1983 - Update
Washington - The US unemployment rate surged to 10.2 per cent in October, the highest in 26 years, as another 190,000 people lost their jobs during the month, the US reported Friday. The figure reported by US Labour Department came after the 9.8 per ...
US jobless rate jumps to 10.2 per cent
Washington - The US unemployment rate surged to 10.2 per cent in October as another 190,000 people lost their jobs, according to US Labour Department figures released Friday. The jobless rate stood at 9.8 per cent in September. Unemployment had been ...
Bulls stop James, edge Cavs - Summary
Los Angeles - The King couldn't deliver in the clutch. Luol Deng and Joakim Noah combined to deny LeBron James a potential game-winning drive in the final seconds as and the visiting Chicago Bulls snapped the Cleveland Cavaliers' three-game winning...
Mortgage lender Fannie Mae posts nearly 19-billion-dollar loss
Washington - US mortgage lender Fannie Mae said Thursday that it would seek 15 billion dollars in federal aid, after posting its ninth consecutive quarterly loss. Fannie Mae reported a net loss of 18.9 billion dollars in the third quarter of 2009, co...
|
|
|
|
|
|
|
|
