Item 1.01
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Entry into a Material Definitive Agreement.
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On August 5, 2019, Gannett Co., Inc., a Delaware corporation (Gannett or the Company), New Media Investment Group Inc., a Delaware
corporation (New Media), Arctic Holdings LLC, a Delaware limited liability company and wholly owned subsidiary of New Media (Intermediate HoldCo), and Arctic Acquisition Corp., a Delaware corporation and wholly owned
subsidiary of Intermediate Holdco (Merger Sub), entered into an Agreement and Plan of Merger (the Merger Agreement), pursuant to which, subject to the terms and conditions of the Merger Agreement, Merger Sub will merge with
and into Gannett (the Merger), with Gannett surviving the Merger as a wholly owned subsidiary of Intermediate Holdco and an indirect wholly owned subsidiary of New Media.
The respective boards of directors of Gannett and New Media have unanimously approved the Merger Agreement and the consummation of the Merger and the other
transactions contemplated thereby.
Merger Consideration and Treatment of Equity Awards
Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the Effective Time), each share of common stock,
par value $0.01 per share, of Gannett (Gannett Common Stock) issued and outstanding immediately prior to the Effective Time (other than Gannett Common Stock held by Gannett as treasury shares, held by New Media or any of its subsidiaries
or held by stockholders who have validly exercised their dissenters rights in accordance with Delaware law) shall be converted automatically into (a) 0.5427 of a fully paid and nonassessable share of common stock, par value $0.01 per share, of
New Media (New Media Common Stock) and (b) the right to receive $6.25 in cash, without interest, plus cash in lieu of any fractional shares of New Media Common Stock that otherwise would have been issued (collectively, the
Merger Consideration). The exchange ratio for the stock component of the consideration was fixed as of the signing of the Merger Agreement, and therefore the value of the stock consideration will fluctuate prior to the closing of the
Merger (the Closing) with changes in New Medias stock price. Immediately following the Effective Time, holders of New Media Common Stock will own approximately 50.5% of the outstanding shares of New Media and holders of Gannett
Common Stock will own approximately 49.5% of the outstanding shares of New Media.
Pursuant to the Merger Agreement, at the Effective Time,
(a) Gannett stock options shall be cashed out based on the cash value of the Merger Consideration, less the applicable option exercise price, (b) Gannett restricted stock units shall be converted into New Media restricted stock units based
on the value of the Merger Consideration, which will generally be subject to the same terms and conditions as applied to the original Gannett award, except that Gannett restricted stock units held by
non-employee
directors of Gannett shall be converted into the Merger Consideration, (c) Gannett performance shares shall be converted into New Media time-based restricted stock units based on the value of
the Merger Consideration and assuming achievement of applicable performance goals in accordance with the terms of the Merger Agreement, which will generally be subject to the same terms and conditions as applied to the original Gannett award (other
than performance-based vesting conditions), (d) Gannett restricted stock awards shall be converted into the Merger Consideration and (e) Gannett phantom share units shall be converted into equivalent New Media phantom share units, which will
generally be subject to the same terms and conditions as the original Gannett award.
Financing
New Media entered into a commitment letter (the Commitment Letter), dated as of August 5, 2019, with Apollo Capital Management, L.P.
(Apollo), pursuant to which Apollo has committed to provide, subject to the terms and conditions of the Commitment Letter, a senior secured term loan facility in an aggregate principal amount of $1.792 billion. The Merger Agreement
includes certain customary financing covenants, which require New Media to use its reasonable best efforts to consummate the financing. Obtaining the financing is not a condition to Closing.
A&R Management Agreement
In connection with entering
into the Merger Agreement, New Media and FIG LLC, a Delaware limited liability company (Fortress), have entered into an Amended and Restated Management and Advisory Agreement, dated as of August 5, 2019 (the A&R Management
Agreement), pursuant to which, among other things, management of New Media will be internalized by December 31, 2021, and the incentive compensation fee payable to Fortress is