NEW YORK (AP) — Providence Equity Partners said Sunday it was ''surprised and disappointed'' by a lawsuit filed Friday by Clear Channel Communications Inc. to force the private-equity firm to close a purchase of Clear Channel's television stations.
Clear Channel said in the lawsuit that Providence has dragged its feet in the $1.2 billion deal for the TV stations, a deal Providence has sought since October to renegotiate. A spokesman for Providence said Sunday the firm has been conducting negotiations amicably to ''work out a mutually acceptable arrangement in difficult market conditions.''
The deal for the 56 TV stations may not be over, as the two sides may be negotiating through the courts. But Clear Channel believes it can sue to compel Providence to complete the deal, while Providence believes it can't be forced to close the deal.
The television-station deal is separate from the $19.5 billion sale of Clear Channel to Thomas H. Lee Partners and Bain Capital, and the lawsuit isn't expected to delay that buyout. But it does add another twist in the Clear Channel buyout, which has been in the works for more than a year, dogged by delays and market skepticism.
In the lawsuit filed in Delaware Chancery Court over the TV stations, Clear Channel wants Providence to complete the deal. But Providence said it was caught off guard by the lawsuit.
''We are surprised and disappointed that Clear Channel would suddenly bring this baseless lawsuit,'' Providence said.
Providence believes Clear Channel has violated the TV-station pact with its lawsuit. The firm said it now believes it doesn't owe the $46 million breakup fee if the deal falls apart.
''Under the terms of the contract, this fee is no longer payable because Clear Channel has commenced this litigation,'' Providence said in a statement Sunday.
Clear Channel has asked for an expedited hearing. If the Providence deal drags past the closing of the Clear Channel buyout, they will have to refile for regulatory approval for the TV-stations sale.