Wall Street Journal, March 13, 2008
By Shira Ovide

An affiliate of Providence Equity Partners acknowledged a settlement is possible in a contentious lawsuit over a sale of Clear Channel Communications Inc.'s television stations.

For nearly a month, Providence Equity, Clear Channel and Wachovia Corp. have been locked in a legal dispute over the sale of the stations.

The media company has blamed the potential buyer, Providence Equity affiliate Newport Television, for delays in closing the deal, valued at more than $1 billion. Providence Equity in turn has blamed Wachovia for balking on commitments to help finance the transaction.

For Clear Channel, there are advantages to ending the dispute quickly, so that it can focus on closing a bigger deal to be taken over by private-equity investors. Clear Channel has said it expects to close its $19.5 billion sale to Thomas H. Lee Partners and Bain Capital by the end of the month, but said it wants to close the TV-station sale before completion of the bigger buyout.

The buyout has been under a shadow of doubt that it will be completed, and anxieties weren't helped this week when a Thomas H. Lee executive sounded vague about a closing date. Asked in an interview Wednesday whether the Clear Channel buyout would close this quarter, THL Partners Co-President Scott Sperling said, "We'll see." He said the firm wouldn't comment on whether the deal will close.

Clear Channel shares fell 3.3%, or $1.20, to $34.99 in 4 p.m. New York Stock Exchange composite trading. That decline has offset the stock-price gains in recent days, as investors began to feel more confident the buyout would close as planned.

In the interview with Bloomberg Television, Mr. Sperling said he stood by Clear Channel's statements about the deal. Clear Channel has said it expects the deal to close this month.

A representative for THL Partners didn't respond to a request for comment.

As for the TV stations, in a court filing dated Wednesday, lawyers for Newport Television said, "The parties are attempting to settle the entire matter by the end of this week."

Providence Equity, Clear Channel and Wachovia declined to comment about the possible settlement.

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