Clear Channel deal to go ahead

Outdoor advertising is Clear Channel's biggest business in the UK

A private equity buyout of US radio giant Clear Channel is set to go ahead after an agreement was struck with the banks who were financing the deal.

Clear Channel and the buyers, Bain Capital Partners and Thomas H Lee Partners, took legal action claiming the banks had reneged on an agreement.

But the court case was delayed while the two sides haggled over how much should be paid for the firm.

The $17.9bn (£9.2bn) buyout is down from the $19.5bn previously agreed.

However, Clear Channel's chief executive, Mark Mays, said that the revised agreement was "a win for our shareholders because it provides them with substantial value and certainty while avoiding the delay and inherent risks associated with complex litigation".

Legal row

The buyout was stuck in 2007 when raising money for such deals was much easier.

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

The buyers and Clear Channel had accused the banks of trying to undermine the deal by changing the terms.

The six banks, including Deutsche Bank, Credit Suisse, Morgan Stanley and Royal Bank of Scotland, had argued that the lawsuits were "without merit".

Analysts had estimated that the buyers would have had to pay Clear Channel up to $500m to walk away from the deal.

Besides its radio business, Clear Channel also has an advertising unit which operates about 70,000 advertising hoardings in the UK.