As filed with the Securities and Exchange Commission on December 15, 2006
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): DECEMBER 8, 2006
METROMEDIA INTERNATIONAL GROUP, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
1-5706 58-0971455
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(Commission File Number) (I.R.S. Employer Identification No.)
8000 TOWER POINT DRIVE
CHARLOTTE, NORTH CAROLINA 28227
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (704) 321-7380
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N/A
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(Former name or address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the obligation of the registrant under any of the
following provisions:
|_| Written communication pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.02 TERMINATION OF MATERIAL DEFINITIVE AGREEMENT
As previously announced, Metromedia International Group, Inc. (the
"Company") had entered into separate lock-up, support and voting agreements
(as amended, the "Lock-Up and Voting Agreements") with representatives (the
"Preferred Representatives") of holders of more than two-thirds of its 4.1
million outstanding shares of preferred stock, par value $1.00 per share (the
"Preferred Stock"). Such matters were reported by the Company on Current
Reports on Form 8-K filed with the United States Securities and Exchange
Commission (the "Commission") on October 2, 2006 and November 20, 2006.
The Lock-Up and Voting Agreements had been entered in anticipation of
the Company concluding certain asset sale transactions contemplated in a
non-binding letter of intent (the "LOI") in effect through December 5, 2006
between the Company and Salford Capital Partners, a private equity and
investment management company based in London ("Salford"). As reported by the
Company on a Current Report on Form 8-K filed with the Commission on December
5, 2006 (the "December 5 Form 8-K"), Salford informed the Company of its
intent to terminate the LOI without further pursuing the asset sale on the
originally contemplated terms.
In light of the termination of the LOI without further action on the
originally contemplated asset sale, and so as to avoid further expenditures by
all parties on the matter, certain of the Preferred Representatives have
advised the Company that they have terminated the Lock-Up and Voting
Agreements, effective December 14, 2006, and as a result the Lock-Up and Voting
Agreements are no longer effective.
Under the terms of the Company's Certificate of Designation governing
the Preferred Stock, the liquidation preference per share on the Preferred
Stock as of December 14, 2006 was $50.00 PLUS $25.51 of accrued and unpaid
dividends, which liquidation preference plus accrued and unpaid dividends is
equal to an aggregate of approximately $312.6 million for all shares of
Preferred Stock issued and outstanding. The liquidation preference on the
Preferred Stock continues to accumulate dividends at a rate of 7 1/4 percent
per annum, compounded quarterly. Pursuant to the Company's Certificate of
Designation, in the event of a liquidation, dissolution or winding-up of the
Company, whether involuntary or voluntary, the holders of the shares of
Preferred Stock are entitled to receive out of the assets of the Company
available for distribution to stockholders their liquidation preference plus
accrued and unpaid dividends in preference to the holders of, and before any
distribution is made on, any shares of the Company's common stock.
ITEM 7.01 REGULATION FD DISCLOSURE
As previously announced, the Company received notification from
Salford of the termination of the LOI in respect of a preliminary offer from
Salford for the acquisition of substantially all of the Company's business
interests in the country of Georgia for a cash price of $480 million. The
proposed transaction had previously been reported by the Company on a Current
Report on Form 8-K filed with the Commission on October 2, 2006 (as such
description has been amended by later filings by the Company with the
Commission), and the termination of the LOI was reported by the Company on the
December 5 Form 8-K.
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On December 8, 2006, the Company received an unsolicited revised
proposal from Salford for the acquisition of substantially all of the
Company's business interests in the country of Georgia for a cash price of
$331 million. The revised Salford proposal is subject to a number of
conditions, including a thirty day exclusivity period, the successful
completion of due diligence, agreement on a transaction structure to effect
the proposed transaction, the execution of definitive agreements in respect of
the proposed transaction and the satisfaction of any required approvals of the
Company's board of directors and stockholders.
The Company's Board of Directors considered the revised Salford offer
and concluded that it did not adequately reflect an appropriate valuation of
the Company's business interests and that acceptance of the revised offer
would, therefore, not be in the best interests of the Company's stockholders.
As a result, the Board of Directors of the Company has unanimously rejected
the revised offer from Salford and has so informed Salford.
In addition, as disclosed by the Company in the December 5 Form 8-K,
Salford made a request in connection with its termination of the LOI that the
Company reimburse Salford for the transaction expenses incurred by it to date
in connection with the proposed transaction in the amount of US $1,010,000.
The Company has completed an evaluation of the specific items Salford
referenced in support of its decision to terminate the LOI for Cause (as
defined in the LOI) and its related claim for expense reimbursement, and
following such evaluation the Company believes such items are completely
without merit. Accordingly, the Company has notified Salford that it is not
entitled to any expense reimbursement under the LOI and, as a result, no such
reimbursement from the Company will be forthcoming.
Certain statements above, other than statements of historical fact,
are "forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements are subject to certain risks
and uncertainties that could cause actual results to differ materially from
those reflected in any forward-looking statements. These forward-looking
statements represent the Company's judgment as of the date of this Current
Report on Form 8-K. The Company is not under, and expressly disclaims any,
obligation to update the information in this Current Report on Form 8-K for
any future events.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
METROMEDIA INTERNATIONAL GROUP, INC.
By: /s/ HAROLD F. PYLE, III
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Name: Harold F. Pyle, III
Title: Executive Vice President
Finance, Chief Financial
Officer and Treasurer
Date: December 15, 2006
Charlotte, NC