iHeart Rejects Liberty… For Now
• iHeartMedia Inc. has formally turned down a $1.16 billion bid from John Malone‘s Liberty Media Corp. for a 40 percent chunk, but other talks are continuing as the company navigates its way through bankruptcy.
That’s the word from Bloomberg, which reports Liberty officially withdrew its bid on June 15 after being informed that its offer for a 40 percent stake wasn’t enough to satisfy the company or its senior creditors. That being said, iHeartMedia says it’s still having “active conversations with other interested parties,” and remains “willing to continue dialogue with Liberty,” adding, “It is possible that such efforts result in the debtors obtaining a higher or better offer.”
Greg Maffei, Liberty’s CEO, has repeatedly expressed interest in a deal for parts of iHeart and has raised the possibility of a higher bid, citing benefits of combining iHeart’s terrestrial radio unit with its stakes in SiriusXM Holdings, Inc. and Pandora Media, Inc. “We remain interested in the company at the right price,” Maffei said on Liberty’s May 9 earnings call. During a May 14 media industry conference Maffei told investors that Liberty had offered to buy a minimum 40 percent stake. “We actually offered to buy up to 90-something,” he said, “But the creditors — at least, some creditors — expressed interest in owning the equity with us.”
One advantage for Liberty is that it accumulated $660 million of iHeartMedia’s debt prior to its bankruptcy filing, paying only $389 million for the stake, according to regulatory filings. That gives Liberty a seat at the table for any restructuring talks, and the bonds could be used as cheap currency for a bid in bankruptcy court. [Special thanks to Randy Kabrich]
