IPO, Direct Listing Among iHeart’s Post-BK Options

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Is no news good news?


The nation’s No. 1 owner of AM and FM radio stations, iHeartMedia, issued a statement today indicating that it is evaluating potential paths “to achieve its listing” following its long-awaited emergence from Chapter 11 bankruptcy protection, expected by the end of June.

The timing is curious, as iHeart is only offering guidance on what it is pondering — and not what it definitively will do upon emergence from debtor-in-possession status, which the company said will occur in the second quarter.

“As previously announced, pursuant to its Plan of Reorganization iHeartMedia is required to use reasonable best efforts to obtain listing of the company’s Class A common stock on a recognized U.S. stock exchange following the completion of its restructuring process.”

That could involve “potential alternative paths to achieving that objective” — including a direct listing or an initial public offering.

“The company is currently in the process of evaluating all such potential paths,” iHeart said, without further comment.

At present, the publicly traded “stub” of iHeart stock trades on the Over the Counter Bulletin Board under the debtor-in-possession designation of “IHRTQ.” As of 2pm Eastern Friday (3/22), shares were down 10.2% to $1.05 but on very light trading,

The OTCBB is also known as the “Pink Sheets,” home to companies with stock dealt between individuals connected by telephone and computer networks. It is also the lowest and most speculative tier of the three marketplaces for the trading of over-the-counter stocks, as defined by Investopia.

“This marketplace offers to trade in a wide range of equities through any broker and includes companies in default or financial distress,” it notes. “Since it has no disclosure requirements, categorization of OTC Pink companies is from information provided by the company.”

This incarnation of iHeart stock was born out of the July 2008 $24 billion merger of predecessor company CC Media Holdings Inc. and a private equity group co-led by Bain Capital Partners and Thomas H. Lee Partners.

Now, as a reconstituted iHeart is set to emerge, a whole new listing could bring the company back to its roots as Clear Channel with a listing on the New York Stock Exchange.

Or, another plan could be in the works.

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