Providence Equity Partners reached a buyout deal with Clear Channel for its TV stations unit last week, but someone forgot to check with the bankers. Wachovia, one of three banks that was to finance the deal, has sued Providence to get out of the deal, the NYT reports.
The original $1.2 billion buyout deal, agreed to last April, has been on the rocks since the fall. And Providence has been trying to renegotiate the price, given the declining economy. Clear Channel sued Providence to get them to close, and last the two sides agreed to lower the price by $100 million. But now Wachovia, which was set to finance $450 million of the original deal, wants out and says the renegotiation voids its original commitment.
But here’s the scary part for Clear Channel: Wachovia is also financing the larger, $25 billion buyout of the rest of the company to Thomas H. Lee Partners and Bain Capital. That deal is not contingent on the TV stations selling, but was agreed to more than a year ago. Wachovia could be looking for a way out.
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