Global Media & Entertainment Investments, an investment firm run by British businessman Michael Tabor, has asked the FCC for approval to increase its position in America’s largest radio company and take its 8.7% stake in iHeartMedia up to 49.99%.
The FCC will now have to get involved and decide whether to allow the increased foreign ownership in the American company it regulates. The FCC has relaxed its rules on foreign investors, but while the November 5 FCC ruling authorized an increase in the overall cap of foreign ownership of iHeart to 100%, it did not address other FCC limitations on foreign ownership by individual investors (which is generally 5% without FCC approval).
iHeart had filed a March 8 Petition for Declaratory Ruling for FCC approval for Global to increase its equity and voting interests in iHeart to 9.99%. But that was not high enough for Global and so as to avoid having to file repeated petitions, Global in its March 12 letter is now seeking a more sweeping blanket permission to increase in interest up to 49.99%.
In May of 2020 iHeart adopted a Stockholder Rights Plan limiting shareholders from acquiring a beneficial interest in 10% or more of class A stock without board approval due to pandemic market volatility. But Global now argues to the FCC that that was not relevant to their request because the Rights Plan is temporary and regardless the Rights Plan contemplates that the board can approve acquisitions in excess of 9.99%. Global also stated that advance FCC approval for 49.99% could facilitate its ability to acquire additional shares once permitted under iHeart’s corporate governance documents without the need to refile with the FCC.
iHeartMedia provided Radio Ink with the following statement: “We are aware of the recent update to the Global Media & Entertainment 13D filing and, as always, iHeart Media will continue to comply with all FCC foreign ownership regulations, including those related to the Global investment.”
This will be the end of iHeart as we know it. Global Media will want their own management at
iHeart, and no way will they be able to navigate and keep iHeart as a multi-platform audio content powerhouse, as Bob Pittman brilliantly achieved.
Where is John Malone–he expressed interest last year, obtained antitrust letter to pursue greater interest in IHM?
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