Private equity firm Silver Lake Partners is reportedly in talks with iHeartMedia’s creditors about buying the company after it emerges from Chapter 11, according to a story in the New York Post. Should the PE firm make an offer, it may want to form a partnership between the radio and streaming giant and arena venue manager Oak View Group, which Silver Lake bought a $100 million stake in earlier this year. Oak View is the entertainment and sports facilities company founded by former Live Nation chief Irving Azoff and former AEG CEO Tim Lieweke. Azoff is no stranger to iHeart, having served on the company’s board of directors from 2010-2017.
Oak View’s Arena Alliance division is partnered with 26 venues in the top 30 markets, including New York’s Madison Square Garden and the Los Angeles Forum. Silver Lake could be eyeing synergies with iHeart’s growing live events business, which ranges from major festivals like the iHeartRadio Music Festival to the travelling Jingle Ball tour.
Silver Lake’s interest comes after iHeart’s creditors on June 15 rejected a $1.16 billion offer from John Malone’s Liberty Media because the bid was too low.
On March 14 iHeart struck an agreement in principle with a group of its lenders on a comprehensive balance sheet restructuring that will reduce its debt by more than $10 billion. Liberty’s offer valued iHeart at $12.9 billion, when factoring in the company’s $10 billion of remaining debt. “Liberty is not going to get iHeart at that price,” a source told The Post. The company’s top creditors peg the company’s valuation between $12 billion-$15 billion, the Post says.
As it works its way through the financial reorganization process, iHeart and its creditors are keeping their options open. The company continues to have “active conversations with other interested parties” and remains “willing to continue dialogue with Liberty,” it said in a June 21 court filing. “It is possible that such efforts result in the debtors obtaining a higher or better offer.”
While Liberty, which owns a majority stake in Sirius XM Radio and minority share of Pandora, offered to buy a minority stake in iHeart, Silver Lake is reportedly interested in a controlling share, making its offer more appealing to creditors, per the Post’s source.