Dex One, SuperMedia reach agreement with lenders on amendments

By Jennifer Chiou

New York, Dec. 6 - Dex One Corp. and SuperMedia Inc. announced an agreement with a steering committee representing senior lenders of both companies on a revised set of amendments to their credit agreements as part of the previously reported proposed merger.

As a result, the companies entered into an amended and restated merger agreement for the transaction that is expected to be completed in the first half of 2013.

According to a news release, the credit agreement amendments will extend the maturity dates of the companies' senior secured debt up to 26 months until Dec. 31, 2016, uphold the basic economic terms and strategic merits of the merger as initially announced and preserve the interests of all investors without any dilution.

The amendments also reduce the number of directors after the effectiveness of the merger to 10 from 11 for Dex One, according to an 8-K filing with the Securities and Exchange Commission.

The filing further stated that if either Dex One or SuperMedia is unable to obtain the requisite consents for the mergers from its stockholders and to the amendments to the respective financing agreements from its senior secured lenders, the mergers may be effected through voluntary pre-packaged plans under Chapter 11 of the U.S. bankruptcy code.

Following the initial announcement of the proposed merger in August 2012, the lender steering committee was formed to evaluate the proposed amendments to the companies' respective credit agreements.

The existing senior credit agreements for both companies require 100% approval from the senior lenders for the amendments, and the companies are working with the steering committee to obtain the requisite approval from the remaining senior lenders, the news release stated.

The steering committee has unanimously agreed to support the revised credit agreement amendments.

Dex One and SuperMedia added that they will seek approval from their respective shareholders for the proposed merger and the pre-packaged bankruptcy plan, if the pre-packaged plan becomes necessary to secure the credit agreement amendments.

Transaction details

The merger has been approved by the companies' respective boards of directors.

Under the terms of the agreement, Dex One and SuperMedia shareholders will exchange their shares for shares in the new company, Dex Media. Dex One shareholders will receive 0.2 share for each Dex One share they own, and Super Media shareholders will receive 0.4386 share for each SuperMedia share they own.

Dex One shareholders are expected to own about 60% and SuperMedia shareholders are expected to own about 40% of the combined company once the transaction closes, which is expected to occur in the fourth quarter.

Dex Media will be led by Alan Schultz as chairman and McDonald. Mockett will lead Dex One through the transaction's close and then step down.

Dex One is a Cary, N.C.-based marketing services provider. SuperMedia is a Dallas-based directory publisher.

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