NEW YORK, Oct. 19, 2017 /PRNewswire/ -- CBS
Corporation (NYSE: CBS.A and CBS) ("CBS") today announced the
commencement of an exchange offer for the separation of its radio
business as part of its previously announced agreement to combine
CBS Radio Inc. ("CBS Radio") with Entercom Communications Corp.
(NYSE: ETM) ("Entercom"). The combined company will have a
nationwide footprint of 235 stations, including stations in 22 of
the top 25 U.S. markets.
The exchange offer represents the next step in the planned
combination of CBS Radio and Entercom, which will be effected
through a "Reverse Morris Trust" transaction. In the exchange
offer, CBS shareholders will have the opportunity to exchange their
shares of CBS Class B common stock for shares of CBS Radio common
stock, which will be immediately converted into the right to
receive an equal number of shares of Entercom Class A common stock
upon completion of the proposed merger, in each case subject to
certain customary terms and conditions. The exchange offer and
merger are generally expected to be tax-free to participating CBS
shareholders for U.S. federal income tax purposes.
"We are very pleased to be taking this important step toward the
split-off of our radio business in a way that we believe is good
for CBS Radio, good for the CBS Corporation, and good for our
shareholders," said Leslie Moonves,
Chairman and Chief Executive Officer, CBS Corporation. "This
exchange offer will give equity holders the opportunity to invest
in what we believe will be a best-in-class radio company, with top
assets and a terrific management team. And for CBS, we expect that
it will unlock even more value and allow us to become even more
focused on the creation and distribution of premium video
content."
Details of the Exchange Offer:
- Holders of CBS Class B common stock will have the opportunity
to exchange some or all of their shares for CBS Radio common stock
at a 7% discount per-share value, subject to an upper limit (as
described below).
- The discount means that tendering shareholders are expected to
receive approximately $1.08 of CBS
Radio common stock for every $1.00 of
CBS Class B common stock tendered and accepted in the exchange
offer.
- The number of shares a CBS shareholder can receive in the
exchange offer is subject to an upper limit of 5.7466 shares of CBS
Radio common stock for each share of CBS Class B common stock
tendered and accepted in the exchange offer.
- If the upper limit is in effect, then the exchange ratio will
be fixed at that limit and tendering shareholders will receive less
than $1.08 of CBS Radio stock for
each $1.00 of CBS Class B common
stock.
- CBS will offer 101,407,494 shares of CBS Radio common stock in
the exchange offer. The number of shares of CBS Class B common
stock that will be accepted in the exchange offer will depend on
the final exchange ratio, the number of shares of CBS Class B
common stock tendered, and whether the upper limit is in
effect.
- CBS Radio common stock will not be transferred to participating
shareholders following the exchange offer. Such participants will
instead receive shares of Entercom Class A common stock in the
merger immediately following the completion of the exchange offer.
No trading market currently exists or will exist for shares of CBS
Radio common stock.
- The exchange offer is scheduled to expire at 11:59 p.m., New York
City time, on November 16,
2017, unless the exchange offer is extended or
terminated.
Subject to the upper limit, the final exchange ratio used to
determine the number of shares of CBS Radio common stock that
participating shareholders will receive for each share of CBS Class
B common stock accepted in the exchange offer will be based on the
simple arithmetic average of the daily volume-weighted average
prices of shares of CBS Class B common stock and Entercom Class A
common stock on the New York Stock Exchange on each of three
valuation dates, the three consecutive trading days ending on and
including the second trading day preceding the expiration date of
the exchange offer period, which are currently expected to be
November 10, 13, and 14, 2017 (the
"Valuation Dates"). Unless the exchange offer is extended or
terminated, the final exchange ratio will be announced in a press
release no later than 11:59 p.m.,
New York City time, on
November 14, 2017, and the exchange
offer will expire at 11:59 p.m.,
New York City time, on
November 16, 2017, leaving two
trading days between the date that the final exchange ratio is
announced and the expiration of the exchange offer. The final
exchange ratio, as well as a daily indicative exchange ratio
beginning at the end of the third day of the exchange offer period,
will also be available at www.cbscorpexchange.com.
Immediately following the completion of the exchange offer, a
special-purpose merger subsidiary of Entercom will be merged with
and into CBS Radio, with CBS Radio surviving the merger and
becoming a wholly owned subsidiary of Entercom. In the merger, each
share of CBS Radio common stock will be converted into the right to
receive one share of Entercom Class A common stock. Entercom will
issue 101,407,494 shares of Entercom Class A common stock in the
merger. In addition, the parties estimate that approximately
3,179,976 shares will be eligible for issuance in respect of equity
awards held by employees of CBS Radio in consideration of the
replacement of their restricted stock units and stock options in
CBS with those of Entercom.
The exchange offer will be subject to proration if the exchange
offer is oversubscribed, and the number of shares accepted in the
exchange offer may be fewer than the number of shares tendered.
Shareholders of CBS Class A common stock may also participate in
the exchange offer by converting or conditionally converting their
shares of Class A common stock into an equal number of shares of
Class B common stock in advance of the expiration of the exchange
offer and following the procedures for tendering such shares set
forth in the exchange offer prospectus.
If the exchange offer is consummated but not fully subscribed,
the remaining CBS Radio common stock owned by CBS will be
distributed on a pro rata basis to CBS Class A common stock and CBS
Class B common stock shareholders whose CBS common stock remains
outstanding after the consummation of the exchange offer.
The transaction is subject to customary closing conditions,
including required regulatory approvals and the approval of
Entercom shareholders. Entercom has scheduled a meeting of
shareholders to be held on November 15,
2017, to approve the issuance of Entercom Class A common
stock in the merger and amend the Entercom articles of association
to classify the Entercom board of directors in connection with the
transaction. Entercom Chairman Joseph M.
Field, a controlling shareholder of Entercom, has agreed to
vote in favor of the transaction. These approvals can be obtained
based solely on the favorable vote of Mr. Field in accordance with
the provisions of a Voting Agreement between Entercom and Mr.
Field, dated as of February 2,
2017.
Upon completion of the merger, approximately 72 percent of the
outstanding shares of Entercom common stock are expected to be held
by pre-merger holders of CBS common stock, and approximately 28
percent of the outstanding shares of Entercom common stock are
expected to be held by pre-merger holders of Entercom common
stock.
For more information about the exchange offer, please visit
www.cbscorpexchange.com or contact the information agent, Georgeson
LLC, at 1-866-741-9588 (toll-free in the
United States) and1-781-575-2137 (outside of the United States).
Goldman Sachs & Co. LLC is acting as financial advisor to
CBS Corporation in connection with the merger.
Forward-Looking Statements
This press release
contains certain statements about CBS, CBS Radio and Entercom that
are "forward-looking statements" within the meaning of Section 27A
of the United States Securities Act of 1933, as amended, and
Section 21E of the United States Securities Exchange Act of 1934,
as amended. These matters involve risks and uncertainties as
discussed in CBS's and Entercom's respective periodic reports on
Form 10-K and Form 10-Q and current reports on Form 8-K, filed from
time to time with the SEC. The forward-looking statements contained
in this press release may include statements about the expected
effects on CBS, CBS Radio and Entercom of the proposed separation
of CBS's radio business and merger of CBS Radio with an Entercom
subsidiary (collectively, the "Transaction"); the anticipated
timing and benefits of the Transaction and CBS's, CBS Radio's and
Entercom's anticipated financial results; and also include all
other statements in this press release that are not historical
facts. Without limitation, any statements preceded or followed by
or that include the words "targets," "plans," "believes,"
"expects," "intends," "will," "likely," "may," "anticipates,"
"estimates," "projects," "should," "would," "could," "positioned,"
"strategy," "future," or words, phrases, or terms of similar
substance or the negative thereof, are forward-looking statements.
These statements are based on the current expectations of the
management of CBS, CBS Radio and Entercom (as the case may be) and
are subject to uncertainty and to changes in circumstances and
involve risks and uncertainties that could cause actual results to
differ materially from those expressed or implied in such
forward-looking statements. In addition, these statements are based
on a number of assumptions that are subject to change. Such risks,
uncertainties and assumptions include: the satisfaction of the
conditions to the Transaction and other risks related to the
completion of the Transaction and actions related thereto; CBS's
and Entercom's ability to complete the Transaction on the
anticipated terms and schedule, including the ability to obtain
regulatory and shareholder approvals and the anticipated tax
treatment of the Transaction and related transactions; the ability
to obtain or consummate financing or refinancing related to the
Transaction upon acceptable terms or at all; risks relating to any
unforeseen liabilities, future capital expenditures, revenues,
expenses, earnings, synergies, economic performance, indebtedness,
financial condition, losses, and future prospects; business and
management strategies and the expansion and growth of Entercom's
operations; price or trading volume of Entercom's common stock;
failure to pay dividends to holders of Entercom's common stock;
impairment charges for FCC licenses and goodwill; Entercom's
ability to integrate CBS Radio's business successfully after the
closing of the Transaction and to achieve anticipated synergies;
and the risk that disruptions from the Transaction will harm CBS's,
CBS Radio's or Entercom's businesses. However, it is not possible
to predict or identify all such factors. Consequently, while the
list of factors presented here is considered representative, no
such list should be considered to be a complete statement of all
potential risks and uncertainties. Unlisted factors may present
significant additional obstacles to the realization of
forward-looking statements. Forward-looking statements included
herein are made as of the date hereof, and none of CBS, CBS Radio
or Entercom undertakes any obligation to update publicly such
statements to reflect subsequent events or circumstances.
Important Notices and Additional Information
In
connection with the Transaction, CBS has filed with the SEC a
Schedule TO with respect to the exchange offer, CBS Radio has filed
with the SEC a registration statement on Form S-4 and Form S-1
containing a prospectus of CBS Radio relating to the exchange
offer, and Entercom has filed with the SEC a registration statement
on Form S-4 relating to the Transaction. Entercom has also filed a
proxy statement, of which the prospectus contained in Entercom's
registration statement on Form S-4 forms a part, on October 16, 2017. INVESTORS AND SECURITY HOLDERS
ARE URGED TO READ THESE DOCUMENTS AND ANY AMENDMENTS TO THESE
DOCUMENTS WHEN THEY BECOME AVAILABLE, AS WELL AS ANY OTHER RELEVANT
DOCUMENTS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT CBS,
CBS RADIO AND ENTERCOM AND THE TRANSACTION. Investors and security
holders may obtain these materials and other documents filed with
the SEC free of charge at the SEC's website, www.sec.gov. In
addition, copies of these materials may be obtained free of charge
by accessing CBS's website at www.cbscorporation.com, or from
Entercom by accessing Entercom's website at www.entercom.com.
Shareholders may also read and copy any reports, statements and
other information filed by CBS or Entercom with the SEC, at the SEC
public reference room at 100 F Street, N.E., Washington D.C. 20549. Please call the SEC at
1-800-SEC-0330 or visit the SEC's website for further information
on its public reference room.
To obtain copies of the exchange offer prospectus and related
documents, or for questions about the exchange offer or how to
participate, please visit the website that CBS will maintain for
the exchange offer at www.cbscorpexchange.com or contact the
information agent, Georgeson LLC, at 1-866-741-9588 (toll-free in
the United States) and
1-781-575-2137 (outside the United
States).
None of CBS, CBS Radio, Entercom or their respective
directors or officers makes any recommendation as to whether any
CBS shareholder should participate in the exchange offer.
This communication is for informational purposes only and shall not
constitute an offer to sell or the solicitation of an offer to sell
or the solicitation of an offer to buy any securities, nor shall
there be any sale of securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such
jurisdiction. No offer of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Participants in the Solicitation
CBS, Entercom and
certain of their respective directors, executive officers and other
members of management and employees may be deemed to be
participants in the solicitation of proxies from shareholders in
respect of the Transaction under the rules of the SEC. Information
regarding CBS's directors and executive officers is available in
its Annual Report on Form 10-K filed with the SEC on February 17, 2017, and in its definitive proxy
statement filed with the SEC on April 7,
2017, in connection with its 2017 annual meeting of
stockholders. Information regarding Entercom's directors and
executive officers is available in its Annual Report on Form 10-K
filed with the SEC on February 28,
2017, and in its definitive proxy statement filed with the
SEC on March 17, 2017, in connection
with its 2017 annual meeting of shareholders. Other information
regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, is contained in the registration statement
and proxy statement/prospectus and other relevant materials filed
with the SEC.
About CBS Corporation
CBS Corporation (NYSE: CBS.A and
CBS) is a mass media company that creates and distributes
industry-leading content across a variety of platforms to audiences
around the world. CBS has businesses with origins that date back to
the dawn of the broadcasting age as well as new ventures that
operate on the leading edge of media. CBS owns the most-watched
television network in the U.S. and one of the world's largest
libraries of entertainment content, making its brand — "the Eye" —
one of the most recognized in business. CBS's operations span
virtually every field of media and entertainment, including cable,
publishing, radio, local TV, film, and interactive and socially
responsible media. CBS's businesses include CBS Television Network,
The CW (a joint venture between CBS Corporation and Warner Bros.
Entertainment), CBS Television Studios, CBS Studios International,
CBS Television Distribution, CBS Consumer Products, CBS Home
Entertainment, CBS Interactive, CBS Films, Showtime Networks, CBS
Sports Network, Pop (a joint venture between CBS Corporation and
Lionsgate), Smithsonian Networks, Simon & Schuster, CBS
Television Stations, CBS Radio and CBS EcoMedia. For more
information, go to www.cbscorporation.com.
About CBS Radio
CBS RADIO is one of the largest
major-market broadcast media operators in the United States and the undisputed leader in
news and sports radio. CBS RADIO produces original audio and
video content, live events and exclusive programming distributed
on-air, online and on mobile platforms. A division of CBS
Corporation, CBS RADIO owns 117 radio stations in 26 markets –
including all of the top 10 radio markets as ranked by Nielsen
Audio – as well as an extensive array of digital assets. CBS RADIO
distributes its programming via AM, FM and HD Radio stations,
Radio.com and CBS Local Digital Media apps, making engaging with
audiences easier than ever before. For more information on CBS
RADIO, please visit www.cbsradio.com.
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SOURCE CBS Corporation