The deal was reported earlier on Monday by the Wall Street Journal.
NEW YORK (Reuters) - Radio operator Clear Channel Communications Inc <CCU.N> agreed to cut its asking price for 56 local television stations by $100 million to $1.1 billion to settle a dispute with the buyer Providence Equity Partners, a person familiar with the situation said on Monday.
The deal was reported earlier on Monday by the Wall Street Journal.
But Wachovia Corp <WB.N>, one of the banks financing the deal, said it was filing a lawsuit to get out of the financing commitment, a move that could derail the deal.
"Providence told us it had renegotiated key terms of its deal with Clear Channel but then demanded that the lenders be held to the terms of the deal it had rejected," said a Wachovia spokeswoman on Monday.
!ADVERTISEMENT!"Our efforts to resolve the issue were unsuccessful and we felt it was in the best interest of our shareholders to ask a court to confirm that the prior commitment is no longer in effect," she added.
Providence agreed last April to pay $1.2 billion to buy the stations from Clear Channel but in November backed away from the deal saying it weighing its options. On February 15 Clear Channel filed a lawsuit in Delaware to force Providence to clear the transaction.
Clear Channel and Providence were not immediately available for comment.
The deal with Providence is unrelated to the pending $20 billion leveraged buyout of Clear Channel by Thomas H. Lee Partners and Bain Capital Partners LLC.
(Reporting by Yinka Adegoke, Megan Davies and Jonathan Keehner; Editing by Quentin Bryar and Derek Caney)
