ION Media gets tenders for over 90% of 13.25%, 9.75% preferreds

By Angela McDaniels

Seattle, July 30 - ION Media Networks, Inc. said it received and accepted tenders for 90.6% of its outstanding 13.25% cumulative junior exchangeable preferred stock, currently accruing dividends at 14.25%, and 95.6% of its outstanding 9.75% series A convertible preferred stock during an exchange offer that ended at midnight ET on Friday.

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% convertibles and $500 initial liquidation preference of 12% convertible preferreds.

In total, the company will issue $458,826,591 of 11% convertibles and $33,779,768 of 12% convertible preferreds.

ION Media also announced that it received consent 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, ION Media was seeking consent to issue the new preferreds. The company needed tenders and consents from a majority of holders.

When the exchange offer launched on June 8, the company offered to swap $7,000 principal amount of 11% convertibles and $1,000 initial liquidation preference of 12% convertible preferreds for each for share of the 14.25% preferreds and $4,000 principal amount of 11% convertibles and $1,000 initial liquidation preference of 12% convertible preferreds for each tendered share of the 9.75% preferreds.

The consideration was increased on July 16 after the company had received tenders for only 25.3% of the 14.25% preferreds and 10.6% of the 9.75% preferreds.

The exchange offer was slated to expire on July 10 and was extended to July 11 after the company received no tenders, to July 13 after a Delaware court denied a motion by plaintiffs to enjoin the offer and consent solicitation and to July 27 in conjunction with the consideration increase.

The offer was 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. (800 431-9643) was the information agent.

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

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