ION Media adds minority consideration, again extends exchange offer for preferreds

By Jennifer Chiou

New York, July 16 - ION Media Networks, Inc. said that because less than a majority of shares of both its 13.25% cumulative junior exchangeable preferred stock, currently accruing dividends at 14.25%, and its 9.75% series A convertible preferred stock had been tendered in its exchange offer, the company will add a minority consideration for tendering holders.

For each tendered 14.25% preferred, holders will receive $7,500 of 11% series A mandatorily convertible senior subordinated notes 2013 and $500 initial liquidation preference of 12% series B mandatorily convertible preferred stock, which will rank junior to any unexchanged preferreds.

For each tendered 9.75% preferred, holders will receive $4,500 of 11% series A convertibles and $500 initial liquidation preference of 12% series B convertible preferreds.

ION also again prolonged its exchange offer, this time to midnight ET on July 27 from 11:59 p.m. ET on July 13.

As of the previous deadline, holders of 14,409 shares, or 25.3%, of the 14.25% preferreds and holders of 1,774 shares, or 10.6%, of the 9.75% preferreds had tendered their securities for exchange.

The company previously extended the offer from July 11 after a Delaware court denied a motion by plaintiffs to enjoin the offer and June 8 consent solicitation. Shareholders were given additional time to review the latest information.

As of July 11, roughly 1,248 shares of 14.25% preferreds and 1,680 shares of 9.75% preferreds had been tendered in the offer.

ION is soliciting consents to amend the certificate of designations of the preferreds to eliminate all voting rights, other than voting rights required by law; its obligation to repurchase the senior preferreds upon a change of control; all redemption rights; all exchange rights for the 14.25% preferreds; and substantially all of the restrictive covenants.

In addition, the company is seeking consent to issue the new preferreds, including the 12% series A-1 convertible preferred stock.

The company requires tenders from a majority of stockholders.

The exchange offer is part of a recapitalization plan in which ION would be taken private by affiliates of Citadel Investment Group, LLC and NBC Universal, Inc.

D.F. King & Co., Inc. is the information agent (800 431-9643).

ION is a network television broadcast company based in West Palm Beach, Fla.

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