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ION Media, Citadel, NBC Universal reach recapitalization agreement; ION to go private
By Lisa Kerner
Charlotte, N.C., May 4 - ION Media Networks, Inc. entered into an agreement with affiliates of Citadel Investment Group, LLC and NBC Universal, Inc. for a comprehensive recapitalization of ION that includes taking the company private.
Under the deal, NBC Universal is transferring to Citadel the call right on Bud Paxson's controlling shares it acquired in November 2005 and Citadel will exercise the call right, begin a cash tender offer for ION's outstanding class A common stock at a price of $1.46 a share and invest $100 million to fund ION's future growth and digital investment plans.
ION will launch an exchange offer and consent solicitation to holders of its other preferred stock for newly issued subordinated debt and preferred stock, a company news release stated.
NBC Universal will continue to hold a minority interest following the restructuring.
In its agreement with Citadel, NBC Universal acquired certain options with an initial term of five years to acquire voting control of ION but is prohibited from exercising control due to federal regulations regarding TV station ownership.
The agreement comes one day after the ad hoc committee of ION's 14¼% preferred stock holders expressed "outrage at the conduct of the company and its directors with respect to their recent acts and omissions."
On May 2, a group of holders of ION's 9¾% series A convertible preferred stock proposed their own restructuring plan. The group is led by Contrarian Capital Management, Litespeed Master Fund, Ltd. and Ore Hill Hub Fund Ltd.
ION is a West Palm Beach, Fla., network television broadcast company.
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