Don't get too worked up about the temporary restraining order issued by a Texas court today against the bank syndicate that is balking at funding Bain and Thomas H. Lee's buyout of Clear Channel. Sure, shares of Clear Channel jumped more than 10% on the news and they're probably high-fiving themselves over this quick win. The order purports to require the banks to fund the acquisition but it won't do any such thing.
If you aren't familiar with the way courts issue TROs, you might not realize that the orders are often issued without the restrained party even getting a hearing before the court. Here the banks weren't represented, according to media reports. One of the key terms here is "temporary." The restraining order won't actually force a funding, which would be far more permanent. What is likely to happen is that the banks will voluntarily waive the funding deadlines in the commitment letter, removing the urgency required to get a TRO.
The most succinct summary of the decision comes from our own Joe Weisenthal, who also writes for Paid Contenet. (Frankly, the time stamp on this item worries us. We thought posting Opening Bell at 7:30 every morning was rough. This went up at 4:23 am. When do you sleep Joe?. Update: As a commenter pointed out, the 4:23 am time stamp is PST, which means it went up at 7:23 am for people who don't live three hours behind the rest of us. But that only deepens the mystery of Joe Dubs productivity, since Opening Bell was posted just one minute earlier this morning. Whatever Joe's on in the mornings, we'll take two please.)
Judge Awards Temporary Restraining Order Against Banks In Clear Channel Case [PaidContent]
Posted by guest, Mar 27, 2008 11:39AM
4:23 am PST is 8:23 Eastern Daylight Time