The report sent shares of IHeart up as much as 10% to $16.01 in late trading on Thursday. Before the rally, the stock had been down 19% this year.
Liberty owns a 4.8% stake in iHeart through Liberty SiriusXM Group; the deal now under consideration could give it control or outright ownership of the broadcaster, according to people familiar with the matter.
Liberty acquired its iHeart stake via debt it took on before the company restructured, which converted to equity when the broadcaster emerged from bankruptcy early this year.
Liberty owns 33% of Live Nation Entertainment Inc., making it the concert giant’s largest shareholder, and 71% of satellite-radio company Sirius XM Holdings Inc.
A deal for iHeart would increase its ability to collaborate among those businesses, potentially creating a bulwark against the rising influence of music-streaming companies.
Last year, Liberty orchestrated Sirius’s purchase of internet-radio company Pandora Media Inc.—in which it also held a controlling stake—for $3 billion, another move intended to compete more effectively against Spotify Technology SA and other on-demand music-streaming services.
|currently included in Liberty Media's portfolio|
Liberty Chief Executive Greg Maffei at an investor day in late November touted the company’s increased focus on audio and particularly its exposure to the “exploding” podcast market including through iHeart, the No. 2 publisher by audience, according to Podtrac, a podcast-analytics company.
If Liberty were to gain control of iHeart, it would represent a major consolidation of the avenues by which music and other audio content is distributed, promoted and monetized.
No comment from iHeartMedia.