According to a report in the Wall Street Journal [a paid publication], it looks like the proposed $19 billion buyout deal for Clear Channel Communications, Inc. (NYSE: CCU) is virtually dead (the private equity sponsors include Thomas H. Lee and Bain Capital Partners LLC).
This shouldn't really be a shock. Even though the credit markets have seemed to stabilize, it's incredibly difficult to justify a mega deal. In other words, why would a bank want to further risk its balance sheet – especially for a company that is showing weakness? After all, with the US economy slowing down, this will mean tougher times for ad-based businesses.
It's certainly ugly in after-hours trading; that is, Clear Channel's stock is down 19% to $26.20. Yes, investors have given up on this deal. What's more, it's really a symbol of the state of the private equity market. It's going to be a long time until we see major deals hit the markets.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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Reader Comments (Page 1 of 1)
3-25-2008 @ 10:56PM
John Huckleberry said...
"It's going to be a long time until we see major deals hit the markets."
I love this qoute though it's wrong. Look for the new deal makers, the new companies, the new breeds of business people and the new credit suppliers. New does not mean young or never been seen. It just means new names, new avenues, new ways, new thinking, new industries for old investors, new risks to take and new oppertunities.
John Huckleberry
CEO
Hollywood Tonight