ION Media Networks moots recapitalization of ION

Televisionpoint.com Correspondent
ION Media Networks, affiliates of Citadel Investment Group, and NBC Universal, have said that they had entered into an agreement for a comprehensive recapitalization of ION, which owns and operates the United States largest broadcast distribution system, consisting of 60 television stations and reaching 83 percent of domestic television households via its station group and cable and satellite platforms. ION is expected to become privately held following the transaction.

NBC Universal is transferring to Citadel the call right on Bud Paxson's controlling shares it acquired in November 2005 when NBC Universal restructured its investment in ION. According to the terms of the agreement, Citadel will exercise the call right, commence a cash tender offer for ION's outstanding Class A common stock at a price of $1.46 a share, and invest $100 million to fund ION's future growth and digital investment plans. In addition, ION will launch an exchange offer and consent solicitation to holders of its other preferred stock for newly issued subordinated debt and preferred stock.

NBC Universal will continue to hold non-voting securities (a minority interest) after the restructuring is complete. In its agreement with Citadel, NBC Universal has acquired certain options with an initial term of five years to acquire voting control of ION. Currently, NBC Universal is prohibited from exercising control over the company because of federal regulations regarding TV station ownership. ION's Board of Directors approved the transaction on the recommendation of a special committee of independent directors.