CaucusCom to Metromedia shareholders: Tender in our offer, Fursa deal can't work

By Lisa Kerner

Charlotte, N.C., Aug. 10 - CaucusCom Ventures LP believes the proposal by Fursa Alternative Strategies LLC to acquire Metromedia International Group, Inc. cannot be consummated and urged shareholders to tender into CaucusCom's fully financed, all-cash $1.80-per-share offer set to expire Aug. 14.

"Fursa's proposal is an illusion, dependent upon financing that we believe can never be raised," CaucusCom director Peter Nagle said in a news release.

"During the nine months we spent working with Metromedia to develop our transaction, we concluded, based on our due diligence of the company and substantive discussions with several debt financing sources, that any acquisition of Metromedia could be effected only on a 100% equity basis."

Nagle added that Fursa president Mickey Harley, a former member of Metromedia's board, could simply be attempting to pressure CaucusCom into raising its offer price.

According to CaucusCom, Fursa's proposal is wholly dependent on the receipt of over $150 million in debt financing - a highly leveraged acquisition that Metromedia cannot support with its cash flow.

Fursa asked Metromedia shareholders in a letter on Friday not to "prematurely tender their shares" to the CaucusCom offer until Fursa and Metromedia complete their discussions. In addition, Fursa said it is "well under way" in its due diligence process and is "highly confident" in its ability to obtain the necessary financing.

On Aug. 7, Fursa reiterated its $2.05-per-share cash bid for Metromedia and affirmed its ability to fund the cash portion of the proposed $69 million equity commitment with a non-binding letter from a debt financing source. Metromedia agreed to discuss the offer with its 7.7% stakeholder.

Metromedia is a Charlotte, N.C., communications company.

CaucusCom is a holding company affiliated with Salford Georgia, a private equity and investment management firm based in the British Virgin Islands, and Compound Capital Ltd., a private investment firm based in Bermuda.

Fursa is a hedge fund management firm based in Lynbrook, N.Y.

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