Clear Channel Communications Inc. said Thursday that a Texas judge has issued an order barring banks from taking steps that would “interfere or thwart” the closing of the proposed $19.5 billion buyout of the nation’s biggest radio station operator.
Clear Channel sought the order in a lawsuit filed Wednesday as the banks were said to be balking at terms of their earlier commitment to finance the deal.
A group of private equity firms have agreed to pay $39.20 a share for Clear Channel. Its shares price has fallen sharply on worries the deal will not be completed.
“We are pleased that the banks and the purchasers will now be able to move quickly to complete the loan documents and fund the merger,” Clear Channel said in a statement. The company had hoped to complete the deal this month.
The company, which is also a major billboard operator, said in a statement a Texas judge issued a temporary restraining order in its favor, saying that “irreparable harm” would result if the banks backing the company’s buyout deal were not immediately prevented from interfering with its closing.
The judge ordered that the banks must not “interfere with or thwart” the closing of the deal by refusing to fund the transaction, insisting on terms that are inconsistent with the commitment letter or refusing to act in good faith in drafting the loan documents.
On Wednesday, in lawsuits filed in Texas and New York, Clear Channel and the buyers group, led by Bain Capital and Thomas H. Lee Partners LLC, claimed the six banks that promised to finance the deal were reneging on the agreement to provide long-term financing, looking to offer little more than a short-term bridge loan.
The lenders, which include Citigroup Inc., Morgan Stanley, Credit Suisse Group, The Royal Bank of Scotland, Deutsche Bank AG and Wachovia Corp., signed commitments when the deal was inked 18 months ago saying they would bear all the risk in changes to the debt market.
The firms contend the banks are trying to kill the deal by putting unreasonable terms on the loan.