Hicks, Muse, Tate & Furst and Capstar Broadcasting Corporation to Acquire SFX Broadcasting in Transaction Valued at Approximately $2.1 Billion.
DALLAS, AUSTIN and NEW YORK--(BUSINESS WIRE)--Aug. 25, 1997--
Holders of SFX SFX Special Effects
SFX Self Extracting (data compression)
SFX SpreadFireFox (IRC)
SFX Sound Effect(s)
SFX Side Effects (counter-strike gaming clan) Class A Common Stock to Receive $75 Per Share in Cash
Plus Spin-Off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. of SFX's Concert and Entertainment Business
Hicks Hicks , Edward 1780-1849.
American painter of primitive works, notably The Peaceable Kingdom, of which nearly 100 versions exist. , Muse, Tate & Furst Incorporated, Capstar Broadcasting Corporation and SFX Broadcasting, Inc. (NASDAQ NASDAQ
in full National Association of Securities Dealers Automated Quotations
U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : SFXBA) today announced the signing of a definitive agreement under which a company newly formed by Hicks Muse and Capstar will acquire SFX Broadcasting, the nation's seventh-largest radio broadcasting The examples and perspective in this article or section may not represent a worldwide view of the subject.
Please [ improve this article] or discuss the issue on the talk page. group based on revenues, in a transaction valued at approximately $2.1 billion, including equity and the assumption of SFX debt.
The transaction, in which Hicks Muse expects to invest approximately $400 million of equity capital, is the firm's largest in terms of total transaction value since its formation in 1989. Capstar, with 243 radio station acquisitions previously completed or announced since its founding approximately one year ago, has become the largest owner and operator of radio stations in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . SFX, upon completion of all previously announced transactions, will own and operate or provide services to 71 stations in 19 markets. Together, Capstar and SFX will rank as the third-largest radio broadcasting group based on revenue as well as number-one in station count, with 314 stations serving 79 markets.
Under the terms of the definitive agreement, which was unanimously approved by the Board of Directors of SFX Broadcasting, the newly formed affiliate of Hicks Muse and Capstar will acquire SFX in a transaction in which each share of SFX Class A common stock, of which there are approximately 14.6 million on a fully diluted di·lute
tr.v. di·lut·ed, di·lut·ing, di·lutes
1. To make thinner or less concentrated by adding a liquid such as water.
2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis, will have the right to receive consideration of $75 per share in cash. The parties have also agreed to a payment of $97.50 for each of the 1.0 million shares of SFX Class B common stock, which are held by senior management of SFX. Prior to this transaction, SFX will spin-off to current shareholders its wholly-owned subsidiary operating the company's live music and entertainment businesses. Each of the resultant 15.6 million fully diluted shares in this spin-off is estimated to have a book value of $5.50. The fully diluted number of SFX shares, 15.6 million, is approximately 350,000 less than previously disclosed because Robert F. X. Sillerman, the executive chairman of SFX, and Michael Ferrel, chief executive officer of SFX, had prior to entering into this transaction voluntarily surrendered approximately 350,000 warrants which they would have been entitled en·ti·tle
tr.v. en·ti·tled, en·ti·tling, en·ti·tles
1. To give a name or title to.
2. To furnish with a right or claim to something: to receive upon a sale of the company. The acquiring company will assume all of SFX's outstanding debt and non-convertible preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders.
Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. , which includes approximately $225 million (pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts.
The phrase pro forma for all pending transactions) in senior bank debt, $450 million in senior subordinated notes, and $225 million of pay-in-kind preferred stock.
Thomas O. Hicks, chairman and chief executive officer of Hicks Muse, will serve as chairman of the combined company following completion of the transaction, and the company's senior management team will include R. Steven Hicks as president and chief executive officer and the other current members of Capstar's senior management team. No changes of SFX station management, station personnel or station format are currently contemplated as a result of the transaction. Tom Hicks
Completion of the transaction is subject to various conditions, including approval by the Federal Communications Commission Federal Communications Commission (FCC), independent executive agency of the U.S. government established in 1934 to regulate interstate and foreign communications in the public interest. of the transfer of SFX's broadcast licenses, approval of the merger by the holders of a majority of the voting rights Voting rights
The right to vote on matters that are put to a vote of security holders. For example the right to vote for directors.
The type of voting and the amount of control held by the owners of a class of stock. attributable to SFX common stock, the approval of certain charter amendments by certain classes of shareholders, and the expiration of the applicable Hart-Scott-Rodino waiting period. Any necessary financing beyond the equity capital to be provided by Hicks Muse will be arranged prior to closing. SFX founder and executive chairman Robert F. X. Sillerman, who owns shares representing approximately 53 percent of SFX's voting rights with respect to the merger, has committed to vote his shares in favor of the transaction. It is expected that the transaction will be consummated in the second quarter of 1998. Tom Hicks of Hicks Muse said: "Since its formation in June 1996, Capstar Broadcasting, under the capable leadership of Steve Hicks and his colleagues on the Capstar management team, has emerged as one of the best-managed major radio groups in the country, and has rapidly become the largest such group in terms of station count. Bringing together the Capstar and SFX station portfolios and station managements under Steve's continued leadership will significantly enhance Capstar's current position as one of the largest, strongest and most successful operators of radio stations in the country."
Steve Hicks of Capstar said: "Over the past four years, SFX has assembled an outstanding group of radio stations and people that, when combined with those of Capstar, will create an enterprise exceptionally well positioned to continue its active participation in the rapidly consolidating radio industry, to grow its revenues and broadcast cash flow, and to build value for its listeners, advertisers and investors. I am particularly pleased to be associated once again with SFX, a company I helped to create, and I am looking forward to working once again with its talented team of operating executives, many of whom I helped to recruit."
Robert F. X. Sillerman, executive chairman of SFX, said: "In the consolidating radio broadcasting industry, much as we believe in its continued status as a very attractive business and in its prospects, the premiums being placed upon companies such as SFX have led us to respond to the flurry Flurry
A drastic volume increase in a specific security. of acquisition offers which we have received. We are extremely pleased that the new management, including SFX co-founder Steve Hicks, recognizes the importance of the people who have made SFX the outstanding company it is today and will continue operating the radio business with the same dedication and professionalism that has always been our goal.
"We are also thrilled to be launching our concert and entertainment business as a new publicly owned Publicly owned can refer to:
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . Indeed, SFX Entertainment is already a major presence in this business. At the time of the spin-off, it will have approximately the same operating cash flow Operating cash flow
Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. as, and significantly less debt than, SFX Broadcasting when it went public less than four years ago. Keeping in mind the overall $2.2 billion value of this transaction to SFX shareholders, including the value of the SFX concert and entertainment business, we note that at the time of SFX Broadcasting's initial public offering, we were a company of nine radio stations in six markets with an enterprise value of about $170 million. In four short years, through the efforts of disciplined management and enterprising en·ter·pris·ing
Showing initiative and willingness to undertake new projects: The enterprising children opened a lemonade stand. employees operating in a dynamic industry, we created a multibillion-dollar company. We now begin anew a·new
1. Once more; again.
2. In a new and different way, form, or manner.
[Middle English : a, of (from Old English of; see of) + new , in a similarly vibrant industry with a company about the same size and noticeably less financial leverage than SFX Broadcasting when it went public, and with, we believe, even greater opportunities. I and the rest of senior management, who developed SFX Broadcasting into the thriving company it is today, are looking forward to the challenge of repeating our success at SFX Entertainment. We anticipate growing SFX Entertainment to be one of the major forces in that industry. As in the radio business a few years ago, there is a positive acquisition environment. We hope to make several announcements in the near future demonstrating our commitment to this expansion strategy and beginning a new chapter in our proven history of creating shareholder value."
Steve Hicks, 47, a brother of Tom Hicks, has twenty-six years of radio broadcasting industry experience, including nineteen as a station owner. In 1987, the Hicks brothers purchased WSIX-FM, in Nashville, and under the leadership of Steven Hicks it quickly became the top country music radio station in the United States. In 1989, WSIX became part of a group known as Capstar Communications, a radio broadcasting investment group headed by Steve Hicks as president. In 1993, Capstar was, in turn, merged into SFX, which Steve Hicks co-founded with Mr. Sillerman, and which they took public in October 1993 at a price per share of $15.00.
SFX's financial advisor with regard to the transaction was Lehman Brothers Lehman Brothers Holdings Inc. (NYSE: LEH), founded in 1850, is a diversified, global financial services firm. It is a participant in investment banking, equity and fixed income sales, research and trading, investment management, private equity, and private banking. , which has rendered an opinion that the transaction is fair to SFX shareholders from a financial point of view. Star Media Group, Inc. also advised SFX with regard to the transaction.
Since its formation in 1989, Hicks, Muse, Tate & Furst Incorporated has completed or currently has pending more than 100 transactions with a total capital value in excess of $24 billion. The firm has offices in Dallas, New York, St. Louis and Mexico City Mexico City
Spanish Ciudad de México
City (pop., 2000: city, 8,605,239; 2003 metro. area est., 18,660,000), capital of Mexico. Located at an elevation of 7,350 ft (2,240 m), it is officially coterminous with the Federal District, which occupies 571 sq mi .
List of SFX stations follows:
San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. , CA
WTDR-FM Hartford, CT
WBZU-FM Albany, NY
New Haven New Haven, city (1990 pop. 130,474), New Haven co., S Conn., a port of entry where the Quinnipiac and other small rivers enter Long Island Sound; inc. 1784. Firearms and ammunition, clocks and watches, tools, rubber and paper products, and textiles are among the many , CT
(A) Joint Selling Agreement (JSA JSA - Japanese Standards Association. ) (B) Local Marketing Agreement (LMA LMA left mentoanterior (position of fetus). ) with a contract to acquire (C) Under contract to be acquired
Under contract to be sold or swapped by SFX are WHFM-FM, WBAB-FM, WBLI-FM and WGBB-AM in Long Island. WGNE-FM in Daytona Beach Daytona Beach (dātō`nə), city (1990 pop. 61,921), Volusia co., NE Fla., on the Atlantic coast and Halifax River (a lagoon); inc. 1876. Center of a rapidly urbanizing area, in a region settled by Spanish Franciscans in the 17th cent. ; KNSS-AM, KRZZ-FM and KKRD-FM in Wichita; WKTF-FM, WMSI-FM, WSTZ-FM, WJDX-FM, WJDS-AM and WZRX-AM in Jackson, Miss; and WKNN-FM and WMJY-FM in Biloxi, Miss.
CONTACT: Hicks, Muse, Tate & Furst Incorporated
Kekst and Company
Capstar Broadcasting Partners
SFX Broadcasting, Inc.
Timothy J. Klahs