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Report: Clear Channel Deal Collapsing

MICHELLE ROBERTS   03/25/08 08:05 PM ET   AP

Clear Channel

SAN ANTONIO — Shares of Clear Channel Communications Inc. plummeted in late trading Tuesday, following a report that the media company's private buyout is on the brink of collapse.

Shares fell $1.89, or 5.5 percent, to end regular trading at $32.56, then fell 21 percent in after-hours trading to $25.82 _ far below the $39.20 per share the buyout firms promised shareholders.

The Wall Street Journal reported on its Web site Tuesday that the private equity firms leading the $19.5 billion buyout were having difficulty reaching terms with the banks committed to financing the deal. The report cited unnamed people familiar with the matter.

A person familiar with the situation, who declined to be named because the person isn't authorized to speak publicly about it, told The Associated Press that the equity partners, led by Thomas H. Lee and Bain Capital Partners LLC, are prepared to fulfill their obligation to fund and close the deal.

Some issues were still being worked out, the person acknowledged.

Because the stock has been trading below the buyout value, the lenders face the prospect of lending far more than the current market value of the company at a time when banks are already nervous about making loans. Failure to make good on previous lending commitments, however, could subject the banks to lawsuits.

Bain Capital said its executives were not commenting Tuesday. A call to a THL spokesman was not immediately returned, and Clear Channel referred calls to the equity partners.

The buyout deal, which has been plagued by delays since it was announced in November 2006, was scheduled to close March 31.

The deal was struck during the years of easy credit that preceded the current crunch that is pressuring the U.S. market. The Clear Channel buyout remains the largest pending buyout in the U.S., according to Dealogic PLC.

Clear Channel is the largest radio station operator in the United States and a billboard giant, with roughly 1 million signs worldwide.

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On the Net:

Clear Channel Communications Inc.: http://www.clearchannel.com

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Filed by Michelle Kung  |