Wall $treet Folly

The Clear Channel fight headline round up

Today in Clear Channel: The company is finally acknowledging that the deal to take it private might collapse owing to the banks' refusal to honor the terms of their original commitment.  The banks, led by Citigroup, with an adverse ruling against them in the lawsuit filed by the sponsors in Texas, are trying to have the lawsuit moved out of that state because they don't want to face that famous 'Texas justice'.  If you read the text of the lawsuits that the sponsors have filed, if their allegations are true, we think that a good dose of 'Texas justice' served up by pit bull lawyer Joe Jamail is just what they deserve.  We hope that the banks get their nuts really squeezed;  the banks can't just decide to move the deal goal posts when they feel like it, as they're trying to do here. 

Some are questioning TH Lee / Bain's motives in filing suit, suggesting that they really want to also walk and may be after the banks to pick up the $600 million deal break up fee.

• Clear Channel Says Private-Equity Buyout May Collapse
• Clear Channel's Challenge
• New move over Clear Channel lawsuit
• Clear Channel bid row casts doubt over $130bn of deals
• Clear Channel: Clear signals that the banks are shutting their doors
• Clear Channel's Challenge
• Links to the lawsuits

Morgan Stanley, Bain, KKR getting pinched as LBO borrowing costs rise; Goldman does an about face and decides Putin up with the risk of doing business in Russia is worth it; Schwarzman will own 1/4 of the Blackstone pie post IPO

                 

Morgan Stanley, Bain LBO Costs Jump; KKR May Pay More on Bonds Goldman Expands Moscow Office to Tap `Huge Potential' Schwarzman to Own 24% of Blackstone After IPO; 4% for Peterson

ISS has spoken: Don't vote for the Clear Channel deal

Barring a bump in the price, the Clear Channel deal is totally toast:

Influential proxy advisory service ISS recommended on Tuesday that shareholders of Clear Channel Communications Inc. vote against a $19.5 billion bid to take the radio station operator private.

Analysts said recommendation could mean that the buyout gets voted down by shareholders at a scheduled meeting on May 8.

ISS, which advises fund managers and pension funds on various issues, recommended on March 29 that shareholders reject a takeover offer of $36.70 a share, or $19 billion, from Thomas H. Lee and Bain Capital, arguing that it undervalued the company.

ISS recommends vote against Clear Channel deal - Reuters

Club deals: Private equity firms sued for price fixing

Thirteen private equity firms were sued on Wednesday alleging that they violated antitrust laws, conspiring together to fix deal prices.  The plaintiffs are holders of Univision Communications, HCA Inc., and Harrah's Inc.:

The lawsuit names big private equity firms, including the Carlyle Group, Texas Pacific Group Ventures Inc., the Blackstone Group, and Kohlberg Kravis Roberts & Co.. It claims that the plaintiffs "were paid less for their equity shares that they sold to the private equity defendants and their co-conspirators than they would have been paid under conditions of free and open competition."

The other buyout firms named in the lawsuit are Clayton, Dubilier & Rice, Silver Lake Partners, Thomas H. Lee Partners, Madison Dearborn Partners, Warburg Pincus and Providence Equity Partners. [Bain and Merrill Lynch are also named in the suit].

The lawsuit, which seeks class-action status, cites news reports of an investigation by the U.S. Department of Justice "into potential collusion by large buyout firms."

On Tuesday, Blackstone President Tony James told the Reuters Investment Banking Summit that he had never seen collusion between private equity firms.

Holders sue private equity firms over deals - Reuters

Smart money?: Bain Capital smarting over Vonage investment

The Boston Herald pulled out its violin for poor Bain Capital, the firm that ponied up the most dough to fund the ugliest IPO of the year: Vonage....