The Wall Street Journal is reporting John Malone’s Liberty Media Corp., which last month officially abandoned a plan buy a stake in bankrupt iHeartMedia Inc., continues to express interest in the nation’s largest radio broadcaster, according to people familiar with the matter.
Liberty, which owns a controlling interest in satellite-radio-broadcasting company Sirius XM, is working on revamping its initial offer, one of the people said. The media company had offered to pay about $1.2 billion for a 40% stake in iHeartMedia before withdrawing its bid last month.
Talks to sell a stake in iHM are still in early stages, the person said, and no deal is expected until closer to confirmation of iHM’s reorganization plan.
The radio-station operator’s restructuring plan slashes more than $10 billion in senior debt off the company’s books, and iHM has agreed to get court approval for the proposal by Sept. 20. Much of that debt is the legacy of a leveraged buyout by private-equity firms Thomas H. Lee and Bain Capital, which purchased the company, then known as Clear Channel Communications, as the financial crisis began to take off.
One hurdle to confirmation of a chapter 11 plan and a subsequent sale remains a group of iHM holdouts—the so-called legacy bondholders—who invested in the company before the leveraged buyout. The holdouts, owed about $190 million, have challenged the plan, claiming they are entitled to a bigger stake in the reorganized iHM.
IHM’s creditors, who include Franklin Advisors Inc. and Pacific Investment Management Co., are slated to gain control of the postbankruptcy company. The group led by Franklin and Pimco as well as other lenders and bondholders are backing iHeart’s chapter 11 plan.
Both Liberty and Silver Lake have been in talks with the creditor group led by Franklin and Pimco, as well as iHeartMedia itself, since before the company filed for bankruptcy in March. The creditors turned down the Liberty offer because they felt the price was too low.