Clear Channel shares jump 9.6%

Buyout firms and banks negotiating

NEW YORK - Clear Channel Communications Inc. jumped 9.6 percent in New York Stock Exchange trading as buyout firms and banks negotiated a settlement of lawsuits related to funding the radio broadcaster's acquisition.

There is no assurance an agreement will be reached, Clear Channel said yesterday in a statement. Citigroup Inc. and five other banks may finance the buyout for a reduced price of $36 a share, ending cases pending in New York and Texas state courts, The Wall Street Journal reported, citing people familiar with the matter. The stock advanced $2.87 to $32.87.

Judges delayed proceedings in both cases yesterday. The banks were to face a nonjury trial yesterday in New York state court over whether they must fund the $19.5 billion acquisition by Boston-based Bain Capital LLC and Thomas H. Lee Partners LP. The two firms alleged the banks wrongly backed out of an agreement to finance the deal. The banks rejected the claim and countersued.

"The way the case was developing it was likely the banks would face a Texas jury," said Jake Newman, an analyst at CreditSights, a fixed-income research firm in New York. "They may decide it could cost more to fight in court than fund the deal."

Bain and Thomas H. Lee Partners agreed to pay $39.20 for San Antonio-based Clear Channel last year, valuing the deal at about $19.5 billion. Clear Channel, the largest US radio broadcaster, had declined 13 percent this year before yesterday on investor concern the deal would fall apart.

Lawyers for the banks and buyout firms declined to comment on any settlement talks.