Point of Clear Channel Clarification

I just got off the phone with a Wall Street arbitrager, who is trying to figure out what to do about Clear Channel Communications. The company is trading nearly 25% lower than its agreed-upon buyout price, and yesterday’s DoJ approval actually makes it cheaper for the buyout firms — Bain Capital and THL Capital — to walk away.

What the arbitrager wanted from me was some context around a statement he’d heard attributed to Bain managing director Josh Bekenstein, during yesterday’s panel discussion in Boston. Specifically, Bekenstein had commented that there is still available leverage for “one big deal.”

The arbitrager thought this might have been a nod to the Clear Channel buyout, which still has major question marks surrounding its debt package. But it wasn’t, and I feel some clarification is required:

Bekenstein was trying to make the point that the time is long past where buyout firms could call up banks every day with new leverage requests. But he added that the occasional one-off deal was still possible, if it was presented properly. That “one big deal” to which he referred was a hypothetical new deal, not Clear Channel or any other pending transaction.

It’s also worth noting that an audience member did ask if deals like Clear Channel would close under current debt terms, and Bekenstein declined to comment. Sorry arbitragers — no clues here…