Providence Equity Partners is said to be “surprised and disappointed” about a lawsuit in which Clear Channel Communications claimed that Providence is delaying the closing of their $1.2 billion deal for 56 TV stations. The lawsuit was filed in the Delaware Chancery Court Feb. 15.
The two parties are said to have been in extended negotiations to reset the cost of the stations. The original deal was worked out in April, but many feel that $1.2 billion no longer represents the true value of the stations, based in large part on the cost of borrowing money these days.
According to published reports, Providence has said that it is no longer obligated to cough up a $45 million breakup fee should the deal fall through because of Clear Channel’s litigation. Providence is headed up by broadcast veteran Sandy DiPasquale.
Clear Channel is poised to be bought out by a pair of equity firms. The $19.5 billion buyout is not contingent on the sale of the TV stations.
Providence declined numerous requests for comment. Reuters quoted Providence calling the lawsuit “baseless.”
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Michael Malone, senior content producer at B+C/Multichannel News, covers network programming, including entertainment, news and sports on broadcast, cable and streaming; and local broadcast television. He hosts the podcasts Busted Pilot, about what’s new in television, and Series Business, a chat with the creator of a new program, and writes the column “The Watchman.” He joined B+C in 2005. His journalism has also appeared in The New York Times, The Philadelphia Inquirer, Playboy and New York magazine.