Clear Channel deal in legal war

Clear Channel owns more than 1,000 US radio stations

US radio giant, Clear Channel, and the companies that want to buy it are suing the banks financing the deal.

The buyers, Bain Capital Partners and Thomas H Lee Partners, say the banks are reneging on an agreement to provide $22bn (£11bn) of financing.

They have filed lawsuits to force the banks to come up with the money.

The six banks, including Deutsche Bank, Credit Suisse, Morgan Stanley and Royal Bank of Scotland say the lawsuits are "without merit" and will contest them.

"The behaviour of these banks is irresponsible, unprofessional and unjustified," Mark Mays, CEO of Clear Channel Communications, said in a statement.

"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," he continued.

The deal was struck last year, when raising money for such deals was much easier.

But since then, funds have dried up due to the credit crunch and financing deals has become much more expensive.

Analysts estimate that the buyers will have to pay Clear Channel up to $500m to walk away from the deal.

The banks who agreed to fund the takeover are Citigroup, Morgan Stanley, Deutsche Bank, Credit Suisse, Wachovia and Royal Bank of Scotland.

In addition to its radio operations, Clear Channel has an advertising unit.