Providence Sues Wachovia To Close Clear Channel TV Deal
February 29, 2008 at 5:28 AM (PT)
One can only wonder if the radio sale will hit this many bumps in the road, as PROVIDENCE EQUITY PARTNERS sued WACHOVIA CORP. THURSDAY (2/28) to force the bank to finance the private-equity firm's revised purchase of a group of television stations from CLEAR CHANNEL COMMUNICATIONS.
CLEAR CHANNEL and PROVIDENCE agreed last APRIL to the deal for the 56 local television stations. The parties agreed recently to lower the deal pricetag to $ 1.1 billion from $1.2 billion. But WACHOVIA sued to extricate itself from the transaction, arguing the charges to the terms void its commitment to provide $500 million in financing towards the deal.
In its lawsuit, PROVIDENCE said WACHOVIA came down with a case of "lender's remorse" -- a twist on the "buyer's remorse" claim typically levied against balky acquirers.
"WACHOVIA's irresponsible, unprofessional and unjustified conduct threatens to sabotage the completion of a transaction in excess of $1 billion," PROVIDENCE said in its complaint, a copy of which was obtained by DOW JONES NEWSWIRES.
PROVIDENCE is asking the court to force WACHOVIA to fund the deal, or pay the $45 million breakup fee associated with the deal.