iHeart Media Shares Drop 50%

Insider’s last update on iHeart Media debt problems detailed iHeart’s proposal to give junior bondholders and private-equity owners, Bain Capital and Thomas H. Lee Partners, more than 50% of iHeartMedia equity and 30% of what it owns of Clear Channel, with the rest going to senior bondholders and term loan lenders.  The senior creditors that hold about $12.8B in priority guarantee notes and term loans would get $6B-$7B in new secured notes or loans.

Apparently that proposal is not acceptable to the debt holders, led by Franklin Resources, and iHeart has, once again, extended their deadline for tendering shares.

The market provided a strong indication of their disapproval through the small minority of publicly traded shares traded on the OTC exchange.  Those shares dropped 50% in value from the $1.20/share close on Wednesday down to $0.55/share at the end of trading on Thursday.

We had previously reported on Clear Channel Outdoor and iHeart’s 3rd quarter results earlier this week.  Insider will continue to report updates as they are available.

 

 

What’s bad for the parent may not necessarily be bad for the subsidiary.  Clear Channel Outdoor shares actually rose 5% today.

If Insider were a Clear Channel shareholder he would want Clear Channel Outdoor to be cut loose from a parent which is in obvious financial difficulties and has taken dividends from outdoor advertising asset sales which could have been deployed to expand Clear Channel Outdoor’s business.

 


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