Report: Tension Builds Between iHM And Global Media

Tensions have reportedly broken out between Global and iHeartMedia as the owner of the British radio and outdoor media group seeks regulatory permission to buy up to 49.99% of its bigger US audio counterpart, reports CampaignLive.

Michael Tabor’s Global Media & Entertainment Investments (GMEI) has already bought an 8.7% stake, which it did at the end of January without telling iHeartMedia in advance.

Now iHeartMedia and GMEI have each written to the FCC, which must approve any foreign ownership above 5% for a radio broadcast license holder.

iHeartMedia said in a petition that the FCC should give approval for GMEI to own a stake above 5% and potentially to increase the size of its stake because it would be in the “public interest” and encourage investment – but only up to 9.99%.

GMEI told the FCC in a follow-up letter that it was “frustrated” and “surprised”, because its lawyers had discussed its plan to seek to buy up to 49.99% with iHeartMedia’s lawyers in February and made clear to the US-listed company that its intentions were “not hostile” and it wanted to “co-operate and work together”, GMEI said.

As a result, “GMEI was frustrated to learn that iHeart’s advance approval request in the petition only requested approval for non-controlling voting and equity ownership interests of no greater than 9.99%,” GMEI said.

“GMEI also was surprised that the petition did not reference GMEI’s request to seek advance approval for a non-controlling interest not to exceed 49.99%, nor did the petition attempt to explain the basis for iHM’s unilateral decision to limit the advance approval to 9.99% despite GMEI’s request.”

An 'inconsistency with the FCC’s foreign ownership rules', iHM says

In iHeartMedia's legal filing to the FCC, reveals how it was caught by surprise when the owner of Global, the biggest UK commercial radio broadcaster, bought its 8.7% stake for $117.5m “wholly without iHeart’s knowledge or control”.

iHM said it only learned about the share purchase at the start of February, after Tabor’s investment vehicle, Honeycomb Investments, made a stock market filing.

iHeartMedia passed a resolution last year at the start of the pandemic that means any shareholder that wants to own 10% or more needs approval from iHeartMedia’s board.