INNOVATE in Refinancing and Partial Sale of HC2 Broadcasting

Cleary Gottlieb is representing INNOVATE Corp. (INNOVATE) in a refinancing transaction and partial sale of its subsidiary HC2 Broadcasting Holdings Inc. (Broadcasting) to CONX Corp. (CONX).

On May 29, 2026, Broadcasting entered into a $105 million secured term loan facility with a subsidiary of CONX, as lender, with proceeds used to fully satisfy Broadcasting’s existing 8.5% and 11.45% notes and fund the repurchase of certain equity interests held by Broadcasting’s noteholders.

Concurrently, Broadcasting entered into a merger agreement with CONX pursuant to which a subsidiary of CONX will merge with and into Broadcasting, with CONX expected to own approximately 75% of the surviving entity following closing. INNOVATE is expected to retain approximately 25% of the surviving entity through a subsidiary. The merger transaction signed on May 29, 2026, and is subject to customary closing conditions and required regulatory approvals. In connection with the consummation of the merger, a portion of the loan is contemplated to be contributed, exchanged, or rolled over as consideration.

INNOVATE (NYSE: VATE) is a portfolio of best-in-class assets in three key areas of the new economy. Broadcasting and its subsidiaries strategically acquire and operate over-the-air broadcasting stations across the United States.

CONX is a diversified operating entity seeking opportunities to power the next generation of innovators in communications and connectivity. CONX’s mission is to partner with emerging companies with quality management and strong and differentiated business models with the ability to scale quickly.

For more information, please see the press release.

The Cleary M&A team includes partner Charlie Allen, associates John Bender and Sam Olson, and law clerk Catherine Benestad Hendicott. The debt finance team includes partner Duane McLaughlin and associates Nicholas Pokas, Farida Hassan, David Rubinstein, Anouk Fleury, and Tianyi Zhao, with assistance from law clerk Nathaniel Thompson. Partner Amber Phillips and associates Andrew Lindsay and Nicholas Gekakis are advising on 1940 Act matters. Counsel Victor Chiu is advising on collateral matters. Partner Sean O’Neal and associate Aracely Valencia are advising on restructuring matters, with early assistance from associate Timothy Wolfe. Partner Bill McRae and associate Kelsey Barthold are advising on tax matters, with assistance from associate Kathy Zhang and with partner Matthew Brigham and associate Mingyu Tang focusing on debt-related tax matters. Partner Adam Fleisher and associates Stav Harel and Rosalie (Rosy) Teed are advising on capital markets matters. Partners Amanda Toy and Liz Dyer and associate Eitan Agagi are advising on executive compensation, employee benefits, and ERISA matters. Partner Kenneth Reinker and associate Albin Quan are advising on antitrust matters. Partner Marcela Robledo and associate Natalie Curry are advising on intellectual property and data privacy matters, with support from law clerk Gabriela Landolfo. Associate Alexi Stocker is advising on debt-related sanctions matters.