More than a year ago, Clear Channel and Providence Equity Partners settled on a deal to sell the broadcaster’s 56 TV stations to Providence for more than $1.2 billion.
Now, seeing the stock prices of publicly owned radio companies drop and the price of borrowing increase, Providence doesn’t want to pay the agreed-on price of $39.20 per share. CCU stock closed down Thursday at $30.74.
Clear Channel has now filed a lawsuit to force Providence to complete the deal, a suit that Providence calls “baseless,” Reuters reported. If the private equity firm had walked away from the deal in April, it would have had to pay a termination fee of just under $46 million; Providence says it no longer has to pay the break-up fee because of the suit, reports Reuters.
The TV deal is not related to the leveraged buyout of Clear Channel, which the broadcaster expects to close by the end of this quarter.