SCHEDULE 13D/A: HPS Group and SLF LBI Aggregator Consummate Option Transaction, Boosting Stake in MediaCo Holding to 46.1%

Scott Kapnick, HPS Group GP, LLC, and SLF LBI Aggregator, LLC have filed an amended Schedule 13D, reporting the consummation of an Option Transaction that significantly increases their beneficial ownership in MediaCo Holding Inc. to 46.1% of Class A Common Stock.

Summary

• This Amendment No. 2 to Schedule 13D reports the consummation of the 'Option Transaction' on May 1, 2025, involving MediaCo Holding Inc. and SLF LBI Aggregator, LLC.
• SLF LBI Aggregator, LLC received 7,051,538 shares of MediaCo Holding Inc.'s Class A Common Stock in exchange for the equity interests of certain Estrella Media subsidiaries holding 'Estrella Broadcast Assets'.
• The filing also notes the withdrawal of Estrella Media, Inc. as a Reporting Person.
• The Reporting Persons (Scott Kapnick, HPS Group GP, LLC, and SLF LBI Aggregator, LLC) collectively beneficially own 35,257,690 shares of Class A Common Stock.
• This beneficial ownership includes the 7,051,538 shares from the Option Transaction and 28,206,152 shares issuable upon the exercise of a Class A Common Stock Purchase Warrant issued to Aggregator on April 17, 2024.
• The aggregate beneficial ownership represents 46.1% of MediaCo Holding Inc.'s Class A Common Stock, calculated based on 41,238,824 shares outstanding as of April 30, 2025, plus the newly issued shares and warrant shares.

Sentiment

Score: 7

Explanation: The document reports the successful completion of a previously disclosed strategic transaction and an update on significant beneficial ownership. This is generally a neutral to slightly positive development as it indicates execution of a planned corporate action and a strong commitment from a major investor group.

Positives

• The consummation of the Option Transaction indicates the successful execution of a previously agreed strategic initiative.
• The increased stake by HPS Group and SLF LBI Aggregator to 46.1% suggests a strong commitment and belief in MediaCo Holding Inc.'s future prospects.

Negatives

• The issuance of 7,051,538 new shares and the potential exercise of a warrant for 28,206,152 shares could lead to significant dilution for existing shareholders.

Future Outlook

The document does not provide explicit forward-looking statements or guidance regarding the company's future performance or strategic direction beyond the consummation of the Option Transaction.

Management Comments

• Scott Kapnick is chief executive officer of HPS Investment Partners, LLC, which is a registered investment adviser and is affiliated with HPS Group.
• The principal business of HPS and Aggregator is to engage in making investments in companies through various strategies across the capital structuring including privately negotiated senior debt; privately negotiated junior capital solutions in debt, preferred and equity formats; liquid credit including syndicated leveraged loans, collateralized loan obligations and high yield bonds; asset-based finance and real estate.

Industry Context

This filing reflects a significant ownership consolidation in MediaCo Holding Inc. by a major investment group, HPS. Such moves are common in the media industry as companies seek strategic partnerships or capital injections to navigate evolving landscapes, including digital transformation and content acquisition. The acquisition of 'Estrella Broadcast Assets' suggests a focus on expanding or consolidating media reach, potentially in the broadcast sector.

Comparison to Industry Standards

• The document does not provide specific comparable companies, projects, or results to assess against industry standards. This filing is a disclosure of ownership change rather than a performance report.

Related Party Transactions

• The Option Agreement and subsequent Option Transaction involved MediaCo Holding Inc. and Estrella Media, Inc., which is a subsidiary of SLF LBI Aggregator, LLC (a Reporting Person). This constitutes a related party transaction.

Stakeholder Impact

• Shareholders: Existing shareholders will experience dilution due to the issuance of 7,051,538 new shares and the potential future exercise of a warrant for 28,206,152 shares. The increased concentration of ownership by HPS Group and its affiliates could impact corporate control and future strategic decisions.
• Company (MediaCo Holding Inc.): The company has completed an asset acquisition (Estrella Broadcast Assets) in exchange for equity, which could impact its operational structure and strategic direction.

Key Dates

Keywords

MediaCo Holding Inc., Schedule 13D, Beneficial Ownership, Class A Common Stock, Option Transaction, Warrant, HPS Group, SLF LBI Aggregator, Estrella Media, SEC Filing, Investment Partners, Corporate Governance