trending Market Intelligence /marketintelligence/en/news-insights/trending/9-hvumtnv1w1tjgwp8yoba2 content esgSubNav
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us
In This List

AMC Networks inks deal to buy RLJ Entertainment

Blog

Charter, DIRECTV and Comcast rank as the top 'RSN-friendly' MVPDs

TMT News & Research: 2020 Recap

Quibi's $2 billion bet on mobile video fizzles out

Cable nets struggle with cash flow declines due to cord cutting, pandemic


AMC Networks inks deal to buy RLJ Entertainment

AMC Networks Inc. and RLJ Entertainment Inc. entered into a definitive agreement for AMC Networks to acquire RLJ in a going-private merger with an aggregate enterprise transaction value of roughly $274 million.

RLJ Entertainment is a premium digital channel company, which operates British and international content provider Acorn TV and Urban Movie Channel, or UMC, a subscription video-on-demand service created for African American and urban audiences.

AMC Networks will pay in cash about $65 million to holders of RLJ Entertainment's outstanding common stock, preferred stock and warrants not currently owned by AMC Networks, RLJ Entertainment Founder and Chairman Robert Johnson and their respective affiliates. RLJ Entertainment will become an indirect subsidiary of AMC Networks following the closing of the deal, with Johnson and his affiliates owning a stake of 17%.

RLJ Entertainment's outstanding common stock, other than shares owned by Johnson, AMC Networks and their respective affiliates, will be converted into the right to receive $6.25 per share in cash, without interest. The holders of RLJ's outstanding preferred stock, other than affiliates of AMC Networks, will be offered the opportunity to elect to receive $7.8125 in cash for each underlying "as converted" share of RLJ's common stock in accordance with the terms of such preferred stock. The holders of warrants, other than Johnson, AMC Networks and their respective affiliates, will be paid the excess of the $6.25-per-share merger consideration over the per-share exercise price of their warrants.

Holders of preferred stock who decline to accept the $7.8125 cash offer for their shares, under the agreement, will be entitled to receive for each share of preferred stock a new share of preferred stock to be issued by RLJ after the merger.

Johnson and his affiliates also entered into an agreement with AMC Networks and Digital Entertainment Holdings LLC, a wholly owned subsidiary of AMC Networks, which will see Johnson and his affiliates vote at a special meeting of RLJ's stockholders all of their shares of RLJ common stock in support of the merger. Johnson and his affiliates currently own roughly 43.7% of RLJ's outstanding common stock. AMC Networks also signed separate agreements with Johnson related to the contribution of his RLJ Entertainment securities to DEH immediately prior to the closing of the transaction at the $6.25-per-share merger consideration and governance matters following the closing of the transaction.

DEH plans to exercise all warrants to purchase RLJ common stock that it currently owns in exchange for debt owed by RLJ to DEH. Immediately following the exercise, AMC Networks will beneficially own at least 50.1% of RLJ's then-outstanding shares of common stock on a fully diluted basis. AMC Networks, through DEH, currently owns approximately 30.1% of RLJ's outstanding common stock.

A special committee of RLJ's independent directors approved the deal agreement, which is subject to other customary closing conditions. The parties expect the transaction to close during the fourth quarter.

Citigroup Global Markets Inc. acted as financial adviser and Sullivan & Cromwell LLP acted as legal counsel to AMC Networks in connection with the transaction. Allen & Company LLC acted as financial adviser and Greenberg Traurig LLP acted as legal counsel to the special committee in connection with the transaction.

AMC originally offered in February to buy the outstanding shares of RLJ Entertainment not currently owned by AMC Networks or entities affiliated with Johnson for $4.25 per share in cash.