INNOVATE closes 75% HC2 Broadcasting sale to CONX, extinguishing $105 million bridge

INNOVATE Corp. (NYSE: VATE) completed the sale of a 75% controlling interest in HC2 Broadcasting to CONX Corp. on September 1, retaining 25% of the business. The merger extinguished HC2's $105 million Bridge Loan Facility in full and terminated the related New Loan Agreement. CONX also committed up to an aggregate $75 million in equity for the surviving entity.

The close completed the merger under the May 29, 2026 Agreement and Plan of Merger among HC2 Broadcasting Holdings Inc., HC2 Broadcasting Holdco, LLC, HC2 Merger Sub, LLC and CONX. CONX holds its 75% interest through CONX Broadcast Group, LLC. INNOVATE's retained 25% interest is subject to post-closing purchase price adjustments and certain expense and indemnification obligations.

The equity commitment is funding for the broadcasting business. INNOVATE will not receive any cash proceeds from the transaction unless a CONX affiliate exercises its option to acquire up to 80.1% of the surviving entity, according to the company's announcement. Approximately $3.7 million of CONX's equity commitment was funded at closing, with the balance payable after closing subject to adjustments.

On September 2, HC2 converted to a Delaware limited liability company named HC2 Broadcasting Holdings LLC. Its LLC agreement provides for a three-member board with two CONX directors and one INNOVATE director, giving CONX board control.

The agreements leave room for ownership to change. INNOVATE may acquire up to an additional 15% of the surviving entity from CONX during the 18 months after closing. Separately, the CONX affiliate's option to acquire up to 80.1% runs for two years from May 29, 2026, with related put-style rights for INNOVATE under the agreements. Those rights are conditional; the closing itself does not deliver cash proceeds to INNOVATE.

HC2's Class A and low-power television portfolio includes more than 260 broadcast television stations distributing over 50 broadcast networks across more than 40 states, according to the announcement. The transaction follows the Broadcasting segment refinancing announced June 1, 2026.

The next developments to watch are the post-closing adjustments, payment of the remaining equity commitment and any exercise of the ownership options. Those steps will determine how the funding and ownership arrangements develop after the September 1 close.