Clear Channel (CCU) - Bain Capital Partners/THL
Settlement Negotiations Announced(May 13, 2008 9:05AM)
As disclosed by CCU and widely reported since yesterday afternoon, the legal processes in both New York and Texas have been delayed as the parties have entered negotiations to settle the financing issues involved in this transaction.
As this development has been the expectation of this publication from the early stages of the lending banks' attempted default in financing the deal, there is very little to add at this stage. The banks very clearly realize their precarious situation -- not only from a legal standpoint, but from a business standpoint -- and, despite CCU's obligatory cautious posture regarding the future of the transaction, are essentially forced into reaching a settlement with CCU, Bain, and THL.
According to most reports, a settlement agreement reducing the terms of the deal to $36 per CCU share is currently on the table. It would not be terribly surprising if the parties ultimately agreed to settle at terms somewhere between $36 and current $39.20 level in order to allow this transaction to proceed to completion.
Proceedings in New York and Texas are scheduled to resume today.
Huntsman Corporation (HUN) - Hexion Specialty Chemicals
May 13, 2008 (8:50a) - EU Review Details
The EU review of this transaction officially started on May 8, 2008. A provision deadline of June 16, 2008 has been established for this case (M.4835).
The filing of the EU notification must be viewed as an indication that the companies have made significant progress with the regulator and perhaps have submitted remedies for the epoxy resin overlaps which have delayed the regulatory processes to this point.
Given the extremely long pre-notification period, and ongoing HSR review in the U.S., there is very little expectation that EU consent will be granted within the current review period. However, this is the first substantial positive develop in this deal for several months and must be perceived as an indication that the companies may be able to work through the very complex regulatory issues.
It is much more likely that the European Commission review will be extended into the third quarter of this year (mid-October probably) and some indication of the regulator's direction will probably be known before the end of the summer.
Again, this is an extremely complicated combination for the EU to resolve (as well as the FTC), so there is very clearly a chance of rejection from one or both regulators.
CKX, Inc. (CKXE) - 19X, Inc.
May 13, 2008 (8:30a) - Revised Offer Proposal Announced
CKXE has announced the receipt of a revised offer proposal from 19X for $12.00 per CKXE share. CKXE has issued the following statement with respect to the proposal:
"The revised offer has been submitted to and is being reviewed by the same Special Committee of the Board of Directors that reviewed and recommended the original transaction. While CKX cannot predict how long it will take for the Special Committee to review and respond to a revised offer and, in the event an agreement can be reached, obtain board approval, 19X has requested that, if an agreement can be reached, the Company take all commercially reasonable steps to be in position to file revised proxy materials reflecting any changes to the transaction by no later than May 22nd."
This obviously represents yet another situation in which financing difficulties will threaten completion. 19X has appropriately termed the broader market issues as a "seismic shift in the buyout world" where essentially any deal involving financing conditions is subject to turmoil.
In this case, CKXE appears to have very little choice but to accept the revised offer, or suffer the short- and long-terms consequences of yet another failed transaction. Based on this factor alone, the revised offer is anticipated to be accepted by CKXE within the next several weeks.
