Clear Channel (CCU) Pistol Whips It Banks? (C)(DB)(MS)(CS)(RBS)(WB)

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Clear Channel (CCU) has a leveraged buy-out in place. Of course, like many of these deals cut last years, the banks tried to walk out a side door. often claiming that the businesses they were buying had fallen apart, In most cases that was a convenient truth.

The LBO firms doing the deal, Thomas H. Lee Partners and Bain Capital, decided not to let its banks walk and took them to court, The case looked like a winner.

According to The Wall Street Journal, the banks backed down and got a very small concession in the process. The paper writes "Under the proposed settlement terms, the banks would fund Clear Channel’s buyout at $36 per share, down from the original price of $39.20." CCU says No settlement has been reached by the parties and there can be no assurance that any settlement will be reached. Clear Channel will not comment on any potential settlement terms or the likelihood that a settlement agreement will be reached." Sounds a bit legal.

If the settlement works, for Citigroup (C), Deutsche Bank (DB), Morgan Stanley (MS), Credit Suisse (CS), Royal Bank of Scotland Group (RBS) and Wachovia (WB) it is a set-back, but no one gave them permission to stick it to CCU. Now, the get to reap the fruits of that.

Douglas A, McIntyre