Further to its press releases of June 7, 2017 and September 13,
2017, WOW! Unlimited Media Inc. (the "
Company" or
"
WOW! ") (
TSXV: WOW) and Bell
Media Inc. ("
Bell Media") are pleased to announce
that they have executed an amended and restated asset purchase
agreement (the "
Agreement") in connection with the
previously announced acquisition of a Category B specialty service
(the "
Broadcasting Licence") from Bell Media by
WOW! Unlimited Networks Inc. (“
WOW! Networks”), a
wholly-owned subsidiary of WOW! (the
"
Transaction"). Pursuant to the updated terms of
the Agreement, in exchange for the issuance of an aggregate of
3,433,446 common voting shares in the capital of WOW! (the
"
Consideration Shares") to Bell Media at a deemed
price of $2.00 per Consideration Share for aggregate consideration
of $6,866,892, WOW! Networks acquired an exclusive option
(the "
Option") to receive the Broadcasting
Licence, for nominal consideration, at any time prior to December
31, 2018. If WOW! Networks does not exercise the Option before such
date, it will be deemed to have exercised the Option as of December
31, 2018 and the Broadcasting License will be automatically
conveyed to WOW! Networks on April 1, 2019, without any further
actions from WOW! or WOW! Networks.
As announced on July 11, 2018, the Transaction
was approved by the Canadian Radio-television and
Telecommunications Commission (the "CRTC").
Upon the closing of the acquisition of the
Option (the “Initial Closing”), WOW! and Bell
Media have entered into a lock-up agreement
(the "Lock-up Agreement") pursuant to which,
among other things, Bell Media has agreed not to sell, transfer or
assign the Consideration Shares for a period of up to twenty-four
(24) months following the closing of the Transaction.
At the Initial Closing, WOW! and Bell Media have
also entered into an investor rights agreement (the
"Investor Rights Agreement") pursuant to which
Bell Media has been granted: (i) the right to nominate one (1)
individual to the board of directors of WOW! at each annual meeting
of WOW!'s shareholders following the Initial Closing, such
individual director nominee being Michael Cosentino; (ii) the right
to appoint a representative to attend all meetings of the board of
directors in a non-voting observer capacity following the Initial
Closing, such representative observer nominee being Sarah Box; and
(iii) subject to customary exceptions, a pre-emptive right to
participate in any future offerings of WOW!'s common voting shares
(the “Common Shares”), non-voting common shares or
variable voting shares on a pro-rata basis following the Initial
Closing.
The Transaction constitutes an arm's length
reviewable transaction under the TSX Venture Exchange
("TSXV") Corporate Finance Manual Policy 5.3 –
Acquisitions and Dispositions of Non-Cash Assets.
Bell Media has further agreed to provide certain
services to effect the transition of the Broadcasting Licence. As
partial consideration for such services, WOW! issued 900,000
non-transferable Common Share purchase warrants (the
"Warrants"), each Warrant entitling Bell Media to
acquire one (1) Common Share for a period of three (3) years from
the date of issuance at an exercise price of $2.00. The Warrants
are subject to vesting, such that a pro rata portion of the
Warrants shall vest and become exercisable on the last day of each
calendar quarter beginning on September 30, 2018.
Immediately prior to the issuance of the
Consideration Shares and Warrants, Bell Media owned or controlled
188,823 Common Shares and $519,000 principal amount of 8%
unsecured convertible debentures due December 14, 2020
(the “Convertible Debentures”) of WOW!. The
Convertible Debentures are convertible into a maximum of
259,500 Common Shares at a conversion price of $2.00 per
Common Share, representing 1.11% of the outstanding Common Shares,
and 0.78% of all the outstanding Common Shares and variable voting
shares of WOW! (collectively, the “Shares”),
on a non-diluted basis, and 2.60% of the outstanding Common Shares,
and 1.84% of all the outstanding Shares on a partially diluted
basis, assuming the conversion of the Convertible Debentures (but
assuming no exercise, conversion or exchange of any other
convertible or exchangeable securities of the Company by other
holders).
Following the issuance of the Consideration
Shares and Warrants, Bell Media owns or controls
3,622,269 Common Shares, $519,000 principal amount of
Convertible Debentures and 900,000 Warrants, representing
17.76% of the outstanding Common Shares, and 13.12% of all the
outstanding Shares, on a non-diluted basis, and 22.18% of the
outstanding Common Shares, and 16.62% of all the outstanding Shares
on a partially diluted basis, assuming the conversion of the
Convertible Debentures and the full vesting and exercise of the
Warrants (but assuming no exercise, conversion or exchange of any
other convertible or exchangeable securities of the Company by
other holders).
The Common Shares and Warrants were issued to
Bell Media as consideration for the Option and services related to
the Broadcasting Licence. Depending on various factors including,
without limitation, conditions in the securities markets and
general economic and industry conditions, Bell Media’s business or
financial condition, and other factors and conditions Bell Media
deems appropriate, Bell Media may develop plans in the future to
subscribe to, purchase, or sell securities of WOW!, to solicit
proxies, or to otherwise participate in any significant transaction
involving WOW! to maintain rights and privileges, such as board
rights, associated with its current ownership position as provided
in the Investor Rights Agreement. At the moment, Bell Media has not
developed any such plans.
Bell Media will be filing an early warning
report under the SEDAR profile of WOW! at www.sedar.com. A copy may
also be obtained by contacting Thane Fotopoulous, at 514-870-4619,
or thane.fotopoulos@bell.ca.
About WOW! Unlimited Media
Inc.
WOW Unlimited Media Inc. is creating a leading
next-generation kids and youth animation business by focusing on
digital platforms and content. The company's key assets include:
the world's No. 1 digital animation network, Frederator Networks,
which consists of an animation production company Frederator
Studios, as well as video on demand channels on digital platforms,
and one of Canada's largest, multifaceted animation production
studios, Mainframe Studios.
About Bell Media
Bell Media is Canada’s leading content creation
company with premier assets in television, radio, out-of-home
advertising, digital media, and more. Bell Media owns 30 local
television stations led by CTV, Canada's highest-rated television
network; 30 specialty channels, including TSN and RDS, and four pay
TV services. Bell Media is Canada's largest radio broadcaster, with
215 music channels including 109 licensed radio stations in 58
markets across the country, all part of the iHeartRadio brand and
streaming service. Bell Media owns Astral, an out-of-home
advertising network of more than 30,000 faces in five provinces.
Bell Media also operates more than 200 websites; video streaming
services including CraveTV, TSN Direct, and RDS Direct; and
multi-channel network Much Studios. The company produces live
theatrical shows via its partnership with Iconic Entertainment
Studios; owns a majority stake in Pinewood Toronto Studios; is a
partner in Just for Laughs, the live comedy event and TV producer;
and owns Dome Productions Inc., one of North America’s leading
production facilities providers. Bell Media is part of BCE Inc.
(TSX, NYSE: BCE), Canada's largest communications company. For more
on Bell Media, please visit www.BellMedia.ca. The head office of
Bell Media is located at 299 Queen Street West, Toronto, Ontario,
M5V 2Z5.
Forward-looking Statements
This release contains forward-looking statements
under applicable Canadian securities legislation that are not based
on historical facts, including, without limitation, statements
containing the words "believe", "may", "plan", "will", "estimate",
"continue", "anticipate", "intend", "expect", "potential" and
similar expressions. Forward-looking statements are necessarily
based on estimates and assumptions made by us in light of our
experience and perception of historical trends, current conditions
and expected future developments, as well as the factors we believe
are appropriate. Forward-looking statements in this release include
but are not limited to statements relating to the Transaction with
Bell Media Inc.. Such statements reflect management of the
Company's current views with respect to future events and are
subject to risks and uncertainties and are necessarily based upon a
number of estimates and assumptions that, while considered
reasonable by WOW, are inherently subject to significant business,
economic, competitive, political and social uncertainties and
contingencies. Many factors could cause our actual results,
performance or achievements to be materially different from any
future results, performance, or achievements that may be expressed
or implied by such forward-looking statements. In making the
forward-looking statements included in this release, the Company
has made various material assumptions, including, but not limited
to general business and economic conditions, the Company's ability
to protect its intellectual property, the Company's ability to
raise additional funding, existing governmental regulations and
changes in, or the failure to comply with, CRTC and other
governmental regulations and changes in business strategy or
development plans. In evaluating forward-looking statements,
current and prospective shareholders should specifically consider
various factors set out under the heading "Risk Factors" in the
Company's Annual Information Form dated April 27, 2018 and in the
Company's management discussion and analysis dated May 29, 2018,
copies of which are available on WOW's profile on the SEDAR website
at www.sedar.com, and as otherwise disclosed from time to time on
WOW's SEDAR profile.
Should one or more of these risks or
uncertainties, or a risk that is not currently known to us,
materialize, or should assumptions underlying those forward-looking
statements prove incorrect, actual results may vary materially from
those described herein. These forward-looking statements are made
as of the date of this release and we do not intend, and do not
assume any obligation, to update these forward-looking statements,
except as required by applicable securities laws. Investors are
cautioned that forward-looking statements are not guarantees of
future performance and are inherently uncertain. Accordingly,
investors are cautioned not to put undue reliance on
forward-looking statements.
SOURCE WOW! Unlimited Media Inc.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
For further information visit:
Website: www.wowunlimited.co
Contact: Neil Chakravarti, President &COO
Email: neil@wowunlimited.co
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