Liberty Media Corp. is offering $1.16 billion in cash to iHeartMedia Inc., the largest radio conglomerate in the country, in return for 40 percent stake in the post-bankruptcy company. Liberty Media’s offer comes after iHeart failed to make a February 1 interest payment, triggering a 30-day grace period with its lenders.
As reported by the Wall Street Journal, and recently announced by iHeart bondholders, Liberty’s proposal comes in an effort to gain a foothold in iHeart’s restructuring.
Cowen analyst Lance Vitanza told the WSJ that “iHeartMedia’s radio business and Liberty-controlled SiriusXM radio could provide a boost to each other’s offerings. The two companies will no longer have to bid against each other for big name talent such as Rush Limbaugh, Howard Stern or the right air NFL games.”
Nevertheless, the article points out that despite the possible benefits stemming from the merger of these two giants, there is little certainty the merger would survive bargaining sessions in bankruptcy court.