The FCC has approved Connoisseur Media’s acquisition of Alpha Media.
The deal is structured for Connoisseur to acquire Alpha Media for the assumption of its debt and shares in the newly combined company. A new subsidiary of Connoisseur Media will be created to hold the company’s existing licenses. CM Holdco will then be merged with AM Holdco. At closing, CM Holdco will enter into loan agreements with Brigade Capital to pay off all of Alpha’s existing debt. Alpha shareholders will also have two warrants to purchase up to 5% shares each of Connoisseur over the next four years at $70 million and $30 million respectively.
The first warrant allows the purchase of up to 5% of Connoisseur at a $30 million valuation. The second permits another 5% at a $70 million valuation. Both warrants have four-year terms. The list of shareholders and warrant holders includes several private equity funds, including MetLife, Hamilton Lane, Intermediate Capital, and Big Sur Capital.
Included in the approval was the grant of a waiver request to retain currently Silent 107.9 KTLH Hallsville TX. KTLH previously simulcast Regional Mexican “La Invasora” 96.7 KOYE Frankston/Tyler until the deal was announced, but was tentatively placed in a trust should the waiver not be granted as the number of stations in the Tyler/Longview market had changed since Alpha’s emergence from bankruptcy, but the waiver grant allows the cluster to stay in-tact.
The FCC said, “We find that strict application of Note 4 is not warranted here given the unique circumstances of the underlying Waiver Request and that granting the Waiver Request will serve the public interest. Additionally, we find that granting a waiver of Note 4 for the proposed transaction will not undermine the purpose of the Local Radio Ownership Rule in the Tyler-Longview Market.” Among the reasons noted were the grant maintains the status quo, the structure of the market, and the competitive status of the market.
Story updated to correct the percentage of the company held by Alpha shareholders.
