Global Media & Entertainment’s petition with the FCC to increase its ownership stake in iHeartMedia has led to a pair of counter-filings as iHeart seeks to limit the size of Global’s possible stake of the company to just 9.99% as opposed to the 49.99% that they originally sought.
In a reply to Global’s original request to the FCC, iHeartMedia writes that they first became aware of Global’s 8.7% purchase of the company through Global’s SEC filing, which was later confirmed by their FCC attorney. Â iHeart states that they support Global’s investment, but not beyond the 9.99% size because of the current Shareholders Rights plan that limits one investor to own more than 10% of the company until May 5, 2021.
The filing notes that the original request and filing were made by Michael Tabor’s Bahamas based Global Media & Entertainment Investments Trust (formerly Honeycomb Investments). While Tabor owns Global Media & Entertainment Ltd., which is the UK broadcasting company, the two holdings at this time are two separate parties.
In response this week Global Media & Entertainment reemphasized that their FCC counsel told iHeart’s that they intended to cooperate and work with iHeart to secure the approvals requested. Global Media President Ashley Tabor-King told the same to iHeart’s CEO Bob Pittman and CFO Rich Bressler. Acknowledging the Shareholders Rights Plan, Global states it does allow for larger investments beyond 9.99% because the Board of Directors can approve it. They also state that the counter-petition by iHeart did not attempt to explain the basis for iHeart’s unilateral decision to limit the advance approval to 9.99% nor reference the original request to seek advance approval for the non-controlling 49.99% stake. Global also states that pre-approval now saves the FCC time and resources by not having to file a new request for approval every time they seek to increase their investment.
Original Report 3/15: Bloomberg reports that Global Media & Entertainment has requested pre-approval from the FCC to increase its ownership stake in iHeartMedia up to 49.9%.
Michael Tabor’s Global Media & Entertainment Investments Ltd. through its Honeycomb Investments Ltd purchased an 8.8% stake in iHeartMedia last month. In a regulatory filing on Monday, it said it had disclosed its plans with iHeart’s counsel and that any further stock acquisition would not be hostile in nature. iHeartMedia adopted a poison pill provision last year that prevents any shareholder from owning more that 10% of the company without Board of Directors approval.
This does not mean any deal is close to fruition. Liberty Media too previously requested and was granted approval to increase its SiriusXM Group’s stake from then 4.8% up to 50%.
Ashley Tabor-King led Global Media is the largest commercial radio operator in the United Kingdom with brands that include “Capital“, “Heart“, “LBC“, “Classic FM“, “Smooth Radio“, “Radio X” and many digital sub-brands of each.
