The Mays' family-run media company Clear Channel Communications has reached a settlement with the banks it sued in March for hindering its proposed merger with CC Media Holdings.
The settlement is based on an amendment to the merger agreement, which now offers Clear Channel shareholders $36 in cash for each share they own, valuing the deal at $17.9 billion.
Alternately, shareholders can elect to receive a one-for-one exchange of some or all of their Clear Channel common stock for Class A common stock in CC Media Holdings, the new corporation sponsored by private equity groups Thomas H Lee and Bain Capital Partners.
The banks, which include Citigroup, Deutsche Bank, Morgan Stanley, Credit Suisse, Royal Bank of Scotland and Wachovia, have further agreed to provide long-term financing to Clear Channel. The date for completion of the merger has been moved to 31 December 2008.
"Importantly, this agreement greatly increases the certainty that the merger will close because all debt and equity funds will be deposited in escrow until the transaction closes," said Mark P Mays, CEO of Clear Channel.
"Clear Channel's business prospects will be enhanced further through an improved capital structure that includes a lower debt load. We are eager to begin working with THL and Bain Capital, the stellar team that will help us to fulfil our considerable promise," he added.