(Adds comment, detail on deal, background)
By Freya Berry
LONDON, Feb 2 (Reuters) - Clear Channel Outdoor Holdings has put on hold the sale of its European outdoor advertising business after the process was hit by a weaker euro, five sources familiar with the matter said on Monday.
Reuters reported last year that the U.S. company's debt-laden parent iHeartMedia was working with Moelis and Citi to help sell the European assets in a deal potentially worth more than $2.5 billion.
But with the euro at a more than 11-year low against the dollar, the company has decided conditions are not currently attractive, sources said.
"You can't take the proceeds and repay (your debt) in dollars if the business you're selling is in euros," one of the sources said, declining to be named since the matter is private.
iHeartMedia declined to comment. Clear Channel, Moelis and Citi did not immediately respond to requests for comment.
The euro has been declining steadily against the dollar after years of weak growth in the euro zone. The decision by the European Central Bank in January to launch a quantitative easing programme has sent the currency to its lowest level since 2003.
Clear Channel is the world's second-largest outdoor advertising firm behind JC Decaux. The French giant explored a bid for the assets, sources told Reuters in December, as part of a consolidation drive in the industry.
Private equity firms including CVC and TPG were also said to be looking, although one of the sources said there had been a lack of real interest in the process. The company may look at a sale in the future, the sources said.
Clear Channel's parent iHeartMedia has been struggling to pay down nearly $20.5 billion in debt since it was taken private in 2008 by Bain and Thomas H. Lee Partners in a $19 billion deal.
In a fast-moving sector where digital billboards and social media interaction are gathering pace, and where a sign in New York's Times Square can cost more than $100,000 a month, companies with little cash to spend can be at a disadvantage.
Changes in the U.S. tax treatment of outdoor displays last year boosted major advertising companies' firepower, encouraging deals in an industry peppered with regional companies, often owned by private equity firms.
Reuters reported in January that European firm Exterion Media Group, owned by buy-out house Platinum Equity, was exploring strategic alternatives, including a major acquisition. (Additional reporting by Liana Baker; editing by Sophie Sassard and David Clarke)