Wachovia sues Prov. Equity over TV-station deal

PROVIDENCE – Investors led by Providence Equity Partners Inc. may have won a $100 million savings on their contract for Clear Channel Communications Inc.’s 56-station Television Group, but in doing so, they may have lost key financing for the deal.
Providence Equity and partners Goldman Sachs Group Inc. and UBS AG reportedly agreed to drop the price they would pay for the Clear Channel stations to $1.1 billion, from the previously agreed $1.2 billion, a source familiar with the contract talks told Bloomberg News today.
But Providence Equity changed the terms of the Clear Channel contract without consulting Wachovia Corp., thereby voiding its contract with the lender, the bank said in a lawsuit filed Friday in Charlotte, N.C., Superior Court.
Wachovia “is no longer obliged to provide any financing contemplated” for the acquisition, the Charlotte-based bank said in its 15-page complaint against Providence Equity and special-purpose subsidiary Newport Television LLC.
“Providence told us it had renegotiated key terms of its deal with Clear Channel, but then demanded that the lenders be held to the terms of the deal it had rejected,” Wachovia spokeswoman Christy Phillips-Brown told Bloomberg News. “Our efforts to resolve the issue were unsuccessful, and we felt it was in the best interest of our shareholders to ask a court to confirm that the prior commitment is no longer in effect.”
Providence Equity spokeswoman Julie Fisher wasn’t immediately available for comment.
The new lawsuit – “Wachovia Bank v. Newport Television LLC, 08-CVS- 4056, Superior Court of North Carolina (Charlotte)” – comes one week after Clear Channel filed suit against Providence Equity, in the Delaware Court of Chancery, seeking to force the equity firm to comply with their contract’s existing terms. (READ MORE)
San Antonio-based Clear Channel Communications Inc. (NYSE: CCU) is a global media and entertainment company whose properties include local radio stations WHJY-FM, WHJJ-FM, WSNE-FM and WHJJ-AM. Additional information is available at www.clearchannel.com.
Providence Equity Partners Inc. – a private investment firm based in Providence, with offices in New York City and London – specializes in media, entertainment, communications and information companies. It has raised $21 billion through seven funds since its founding in 1989. To learn more, visit www.provequity.com.