| |||||||||||||||||||||||
| |||||||||||||||||||||||
The lawsuits over the $25 billion buyout of Clear Channel
Communications Inc. by Bain Capital LLC and Thomas H. Lee Partners LP
are moving quickly, while the wide spread on the buyout of Penn National Gaming Inc. by Fortress
Investment Group LLC and Centerbridge Partners LP reflects worries
about the credit market and the buyers' commitment.
Clear Channel Communications Inc. | CCU
Bain Capital LLC, Thomas H. Lee Partners LP Deal value $19.5 billion Spread 04/22/08 $9.46, or 32% Both lawsuits over the $25 billion buyout of Clear Channel Communications Inc. by Bain Capital LLC and Thomas H. Lee Partners LP are moving swiftly: one in state court in New York over the debt commitment and a tortious interference claim in Texas state court. A jury trial in the Texas case is not set to begin until June 2, just 10 days before the deal's June 12 termination date. The New York case will be heard May 5. Arguments were heard last week in New York on summary judgement motions. In the New York case, the buyers seek to enforce the debt commitment letter. The banks seek a ruling that they haven't breached that agreement and that their damages are capped at $500 million. In Texas, Clear Channel and the buyers allege that the banks interfered with the merger contract by refusing to fund and seek billions in damages. The banks stand to lose roughly $3 billion if they fund the buyout. But as these and other banks raise new capital and-or sell off buyout debt to free up their balance sheets and pricing in the leveraged loan market firms up, the hit on Clear Channel might not seem so painful. - Scott Stuart See TheDeal.com story: Clear Channel buyer dismiss arbitration offer Penn National Gaming Inc. | PENN The wide spread on the buyout of Penn National Gaming Inc. by Fortress Investment Group LLC and Centerbridge Partners LP reflects worries about both the credit market and the buyers' commitment. State regulatory approvals are coming in one by one and could all be in hand by June. Gaming and racing commissions in Mississippi, New Jersey, New Mexico and Ohio have signed off. It still needs approvals in Illinois, Indiana, Iowa, Louisiana, Maine, Missouri and West Virginia. The final state nod may be Missouri. Deutsche Bank AG and Wachovia Bank NA provided financing commitments of roughly $7 billion. The private equity sponsors are putting up $3 billion in equity. In the current market, there is obviously a financing risk. In addition, casino revenues, which are generally thought to be resilient in economic downturns, have been off in recent months by Vegas standards. But the merger agreement allows Penn to force the buyers to fund the equity portion of the buyout and the buyers must make best efforts to obtain debt commitment letters or find alternative financing. The material adverse change clause carves out downturns in the economy, the gaming industry and the securities and financial markets. - Scott Stuart See TheDeal.com story: Shadow cast over Penn buyout See the full issue of the 4.28 Deal newsweekly Categories Deal Video
    Community
 Elsewhere on The Deal.comDealwatchThe Deal MagazineCorporate Dealmaker
The Deal VideoCategories
Blog roll
Archives
| |||||||||||||||||||||||
|
|
|
|
|
