Clear Channel said to cut TV sale price

Clear Channel Communications Inc. has agreed to drop the price for its television group by $100 million in an effort to preserve a deal with a private equity firm, a person familiar with the matter said Monday.

Clear Channel and Providence Equity Partners, a firm that controls the buyer for the 56 stations, agreed in principle to cut the price on the deal that had been valued at $1.2 billion, said a person who spoke on condition of not being identified because the price cut depends on the support of the equity firm's bankers later Monday.

That could be a problem because one of the banks financing the original deal, Wachovia Corp., sued Providence last week, saying a new deal would void its previous financing commitment.

Providence has been trying to renegotiate its purchase with Clear Channel because television advertising has deteriorated since it agreed to the price last April. Clear Channel sued to try to force Providence to close the deal — a lawsuit that would be settled if a new deal is approved.

The divestiture of the television stations is separate from the $19.5 billion sale of Clear Channel to a different set of equity partners. Wall Street has been eying that deal nervously, fearing that the recent credit crunch will sink it.

The stock has been trading at nearly a $10 discount to the $39.20 per share offered by the firms. Company officials still say that the larger buyout is expected to close by the end of March.

Shares of Clear Channel dropped 24 cents to $32.14 Monday.

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