The largest US radio firm is to sue the world’s top banks for hindering a merger. Clear Channel Communications, which is run by the founding Mays family, is suing the banks for “tortious interference” with regard to the $26 billion merger between Clear Channel and CC Media Holdings, a unit of investment firms Thomas H Lee Partners, LP and Bain Capital Partners, LLC.
The defendants, Citigroup, Morgan Stanley, Credit Suisse, RBS, Wachovia and Deutsche Bank, had committed to financing the debt but are allegedly “refusing to execute necessary documents in an overt effort to ‘run out the clock’ and cause [the] merger agreement to collapse”.
“The financial risk to the banks in this suit dwarfs any risk they think they have in funding the debt,” said Mark Mays, CEO of Clear Channel. “The behaviour of these banks is irresponsible, unprofessional and unjustified.
“The defendants have made clear that they are determined, by any means possible, to destroy the merger and thus avoid their obligation to fund, as they are required legally to do.”
Clear Channel, which was founded in 1972 and has been run and owned by the Mays family ever since, agreed to be taken private by CC Media Holdings in 2006.