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Global-linked investment vehicle no longer pushing to acquire major stake in iHeartMedia

By | Published on Friday 12 November 2021


An investment vehicle with links to UK broadcaster Global has seemingly ended its bid to acquire as much as 49.99% of American radio giant iHeart.

Earlier this year it emerged that an entity called Global Media & Entertainment Investments was seeking regulator approval in the US to increase its shareholding in iHeartMedia. That investment outfit is incorporated in the Bahamas and headed up by Michael Tabor, who is also a key backer of the main Global media company in the UK, and father of its President Ashley Tabor-King.

In a letter to US media regulator the FCC in March, GMEI confirmed that it had acquired 8.7% of the publicly listed iHeartMedia. Because of US rules regarding the foreign ownership of media companies, iHeart had sought approval from the FCC for Global’s current equity holding, and also for it to increase its stake to 9.99%.

However, in its letter GMEI said it actually wanted FCC approval to increase its iHeart share-holding beyond 9.99%, maybe going as high as 49.99%. It added that it had asked iHeart itself to seek approval for such a larger share-holding, but – as the US media firm had not done so – it was now seeking FCC approval directly.

GMEI increasing its stake in iHeart beyond 9.99% would actually also need approval from the US media firm’s board, because of the company’s own rules. The fact the board hadn’t asked the FCC for prior approval for GMEI to increase its share-holding beyond 9.99% suggested that it wasn’t too keen on allowing the investment fund to grow its stake to that extent.

But, in its letter earlier this year, GMEI argued that that shouldn’t stop the FCC from pre-approving any future deal it might agree with the iHeart directors.

However, according to the Radio + Television Business Report, GMEI has now called off its bid to get a bigger stake in iHeart.

It reported earlier this week that “GMEI wanted a bigger non-controlling stake in iHeart – one that could expand to 49.99%, if it chose to – but, iHeart didn’t want this, sparking a transcontinental tiff between the two radio industry giants. On 3 Nov, GMEI, through its US legal counsel, abruptly ceased its fight for a bigger iHeart stake”.

GMEI is the second iHeart investor to call off ambitions to significantly increase its stake in the company. At one point Liberty Media was also looking to increase its iHeart stake, maybe to as high as 50%. That also created regulatory concerns, though in Liberty’s case for competition law reasons, given it also controls Sirius XM and Pandora, and owns a third of Live Nation.

But last month it emerged that Liberty had now sold all its iHeart shares, formally ending its ambitions in that domain.