The newspaper said lawyers with the department will review potential antitrust implications of a merger over concerns about the potential for reduced competition.
Earlier this month, The Wall Street Journal said an affiliate of Liberty Media was seeking Justice Department permission to buy a larger piece of iHeartMedia.
Liberty owns a 4.8% stake in iHeartMedia through Liberty SiriusXM Group and the transaction under consideration could give it control or outright ownership of the broadcaster.
Antitrust officials declined to bless the plan immediately, saying they needed more time to review the fallout of any deal, the Post said.
Liberty’s Sirius has not yet made an offer for iHeartMedia, which emerged from bankruptcy six months ago, the Post reported, citing an iHeart source with direct knowledge of the situation said.
iHeartMedia’s three largest shareholders, who control about 50% of the stock, are expected to demand more than $20 a share, the source said.
iHeartMedia, which has more than 858 stations, is the largest radio station group owner in the United States, both by number of stations and by revenue, including several in New York, Chicago and Los Angeles.
The company said it has more than a quarter billion monthly listeners in the U.S., according to its website.
Liberty acquired its iHeartMedia stake through debt it took on before the company restructured, which converted to equity when the broadcaster emerged from bankruptcy early this year.
Based in Englewood, Colorado, Liberty Media is controlled by Chairman John Malone. The company's holdings include 71% of Sirius XM Holdings (SIRI) - Get Report, 33% of Live Nation Entertainment (LYV) - Get Report, as well as the Atlanta Braves, and Formula 1 racing.
The Department of Justice declined to comment. Neither Liberty Media, nor iHeartMedia responded immediately to requests for comment.
Shares of iHeartMedia were 2.4% to $15.62.