By Lisa Kerner
Charlotte, N.C., July 17 - Metromedia International Group, Inc. agreed to be acquired by affiliates of Salford Georgia and Compound Capital Ltd. for $1.80 per share in a 20-day cash tender offer set to begin by July 20.
Salford and Compound's offer is conditioned upon 63.3 million shares, or 61.3%, of Metromedia's stock being tendered in the offer. The agreement includes a $5.5 million termination fee.
Metromedia's board approved the deal, and shareholders holding some 34.5% of the company's stock agreed to vote in favor of the transaction.
The per-share price is a premium of about 29% over Metromedia's closing price on July 16 and an 18% premium over the average closing price of the shares for the last 12 months.
CaucusCom Ventures LP and CaucusCom Mergerco Corp. are the acquiring affiliates of the investment firms, according to a company news release.
Metromedia's 7.25% cumulative convertible preferred stock will remain outstanding following the tender offer and the merger.
"Following initial presentation of this proposal some months ago, the company's board of directors undertook a comprehensive process to assess alternatives for maximizing stockholder value," Metromedia chief executive officer and president Mark Hauf stated in the release.
"We concluded that the agreement with the Salford/Compound group offers excellent value to Metromedia's common stockholders and delivers such value quickly by means of the cash tender offer. Furthermore, although the Salford/Compound group does not presently contemplate a tender for the company's preferred stock, if the merger is consummated, our preferred stockholders will have the right to seek appraisal of the fair value of preferred shares."
Metromedia was advised by Evercore Group LLC; Paul, Weiss, Rifkind, Wharton & Garrison LLP; and Richards, Layton & Finger, PA.
Metromedia is based in Charlotte, N.C., and owns interests in several communications businesses in the country of Georgia.
| Acquirer: | Salford Georgia and Compound Capital Ltd.
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| Target: | Metromedia International Group, Inc.
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| Price per share: | $1.80
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| Announcement date: | July 17
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| Termination fee: | $5.5 million
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| Expected closing: | Upon approvals
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| Stock price for target: | Pink Sheets: MTRM: $1.39 on July 16
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