AMC Networks Inc. offered to buy the outstanding shares of RLJ Entertainment Inc. not currently owned by AMC Networks or entities affiliated with Robert Johnson for $4.25 per share in cash.
AMC Networks intends RLJ Entertainment to become a privately owned subsidiary of AMC Networks, with a minority stake held by Johnson, the company said Feb. 26. AMC Networks also said that it has no interest in disposing of its stake in RLJ Entertainment or participating in any other strategic process.
The offer price represents a 10% premium to the closing price of the RLJ Entertainment common stock on Feb. 23, a 12% premium to the volume weighted average trading price of the RLJ Entertainment common stock over the last 10 trading days and a 126% premium to the closing price of the RLJ Entertainment common stock on the day before the announcement of AMC Networks' initial investment.
AMC Networks expects the RLJ board to form a special committee of independent directors to consider the proposal with the assistance of an outside financial adviser and legal counsel and to negotiate the proposal with RLJ. Johnson and the directors of RLJ Entertainment nominated by AMC Networks will not participate in the evaluation of the proposal.
Citigroup Global Markets Inc. is acting as financial adviser and Sullivan & Cromwell LLP is acting as legal counsel to AMC Networks in connection with the transaction.
RLJ Entertainment is a digital channel company that serves distinct audiences primarily through its over-the-top branded channels, Acorn TV (British TV) and UMC (Urban Movie Channel).