Pressure Mounts On Banks In Clear Channel Buyout
April 4, 2008 at 5:23 AM (PT)
The giant banks providing the debt for the $27 billion buyout of CLEAR CHANNEL COMMUNICATIONS got a one-two punch of bad news YESTERDAY (4/3), as pressure continued to mount for them to follow through with the deal, reports THE NEW YORK POST. According to people familiar with the matter, big shareholders of CLEAR CHANNEL, including hedge fund HIGHFIELDS CAPITAL, are threatening to pull their trading business from CITIGROUP and DEUTSCHE BANK if they don't proceed with their financing of the buyout.
The shareholder threat is the latest twist in an increasingly high-stakes battle between deep-pocketed private-equity titans BAIN CAPITAL and THL PARTNERS and the six banks set to finance the mega-deal. Some estimate that HIGHFIELDS paid as much as $12 million in fees to CITI last year for their prime brokerage services.