Michael Tabor, the investment mogul behind the British radio and outdoor media group Global, has taken a stake of almost 9% in its bigger US audio rival, iHeartMedia, in a surprise move.
A US stock market filing shows Tabor is the “beneficiary” of a trust that owns Honeycomb Investments, which spent $117.6m (£85m) to acquire the 8.8% investment in iHeartMedia at the end of January.
Tabor, who has made his fortune through bookmaking and investments, is listed as a citizen of the United Kingdom.
A spokesperson for Honeycomb Investments confirmed the share purchase to Campaign, saying it was “pleased to be able to have acquired this stake in a sector that it knows well”.
IHeartMedia is the biggest commercial radio operator in the US, with 850 stations in 160 markets and revenues of $3.68bn in 2019, according to its most recent annual results.
That is roughly three times the size of Global Media & Entertainment, the UK parent company of Global, which is the biggest media owner in commercial radio and second biggest in outdoor in the UK, with revenues of £825m in the year to March 2020.
Both companies have said in their financial results that revenues have fallen because of Covid-19.
IHeartMedia has had historic debt problems but restructured its finances in 2019 as part of a Chapter 11 process, slashing its debt from $16.1bn to $5.75bn and separating itself from outdoor business, Clear Channel, which is now an independent company.
IHeartMedia took another step that made itself potentially more attractive to investors in November 2020 when it said it had received authorisation from the Federal Communications Commission, the US communications regulator, that allows the company to increase “foreign ownership” to up to 100% of its shares.
It is understood there are other FCC limitations on foreign ownership, which means individual investors still need regulatory approval for significant shareholdings.
IHeartMedia declined to comment on Tabor’s share purchase.
The spokesperson for Honeycomb Investments said: “Honeycomb Investments Ltd has acquired a circa 8.8% shareholding in iHeartMedia, as disclosed in our SEC filing on Friday.
“IHeart is the largest radio business in the US and Honeycomb is pleased to be able to have acquired this stake in a sector that it knows well.
“Honeycomb’s investors, the Tabor family, own Global, the largest radio and outdoor advertising company in the UK.”
A spokesperson for Honeycomb Investments did not elaborate further on the Tabor family’s intentions.
Global declined to comment.
The share purchase will fuel speculation about a possible tie-up between iHeartMedia and Global.
Tabor and his son, Ashley Tabor-King, set up Global in 2007 and expanded it through acquisition, notably by buying GCap, the owner of Capital Radio, for £375m in 2008 and taking the listed company private.
More recently, Global made a triple acquisition in outdoor, buying Primesight, Outdoor Plus and Exterion Media in 2018, in an audacious expansion move.
Tabor is a person with “significant influence or control” over Global, according to a filing for the UK parent company, Global Media & Entertainment, at Companies House.
Global’s accounts show it took a big impairment charge, chiefly on the value of the outdoor business, last year.
Gill Hind, chief operating officer of Enders Analysis, said: "You've got to question where Global can go now in the UK. There's no further room to grow – they can't take any more market share in radio.
"The US is the biggest market and iHeartMedia is doing interesting things with podcasts. But unless there's a way of gaining some control, you have to question what's the benefit [for the Tabor family]."