Report: Private Equity Firm Offers iHM Investment Deal

Private-equity firm Silver Lake has reached out to iHeartMedia Inc. and its largest creditor group with an offer to invest about $500 million in the radio station operator, according The Wall Street Journal citing people familiar with the matter.

iHeartMedia’s largest creditor group, led by Franklin Mutual Advisers Inc. and Pacific Investment Management Co., hasn’t accepted Silver Lake’s offer.

Silver Lake, known for its investments in technology and media companies, would invest through convertible preferred shares, a hybrid instrument between debt and equity. Convertible preferred shares  typically pay interest, and get paid before common equity. They also come with an option to convert to common equity at a specified share price.

Silver Lake views iHeartMedia, the biggest radio broadcaster in the U.S., as an attractive growth investment opportunity, according to two of the people familiar with the proposal.

John Malone’s Liberty Media Corp. had initially proposed investing $1.16 billion for a 40% equity stake in iHM in February, before the company’s March bankruptcy filing. But in June, Liberty backed out of the deal, saying iHM’s results were below expectations. Still, the parties involved have continued informal talks in an effort to revive the deal, according to the people familiar.

The goal for both Liberty and Silver Lake is to negotiate a deal to invest in the company before it emerges from bankruptcy, the people said. iHeartMedia faces a Nov. 24 deadline to file a reorganization plan and has until March 2019 to get the bankruptcy court to confirm the plan.

If iHeartMedia and its creditors are able to reach a deal with either Liberty or Silver Lake, the investment would bring in more money to distribute to creditors.Report