Citadel Commits $100 Million To Ion

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Citadel has sweetened its offer to buy Bud Paxson's controlling interest in Ion Media Networks for about $75 million by offering another $100 million cash investment in the network/station group if the restructuring--which was proposed by NBC and Citadel jointly-- is approved. The company has also promised to boost the upside for preferred stockholders.

Citadel had promised to invest in the company, but this is the first time it has put a figure to the pledge.

That deal-sweetener comes in response to a preferred stockholder-driven counter proposal that was offered up in February. That proposal also included the possibility of Chapter 11 bankruptcy, which Ion has said is not on the table.

When Paxson exited the business in November 2005, NBC was required to transfer control of his stake to a strategic partner and investor Citadel stepped up. NBC had to give up its stake because FCC regulations prevent the network from owning a controlling interest in Ion's stations.

In an amended filing with the Securities and Exchange Commission on March 29, Citadel said it would "commit to invest an additional $100 million in cash in the Company following the closing of the proposed transaction." Citadel is offering to pay $1.41 per share, which at the time of the proposal was several times the share price.

Both the NBC/Citadel and shareholder restructuring are subject to a board vote and FCC approval of the transfer of the stations.

NBC/Universal had no comment.

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