By Devika Patel
Knoxville, Tenn., Feb. 27 - Westwood One, Inc. released further details of a $100 million private placement of common shares and series A convertible preferred stock with the Gores Group, LLC in an 8-K filed with the Securities and Exchange Commission on Wednesday.
Gores will buy $12.5 million of Westwood One's common shares, or 7,142,857 shares at $1.75 per share.
At Westwood One's option, Gores also will buy up to an additional $12.5 million of common stock, or 7,142,857 shares, at $1.75 per share and between $50 and $75 million of 7.5% series A convertible preferred stock
The preferreds will be convertible into common shares, with an initial conversion price of $3.00 per share.
Westwood One may force conversion if the closing price of its common stock equals or exceeds $4.00 for 60 trading days in any 90-day trading period or if the company sells $50 million or more of its common stock to a third party at a price per share of at least $4.00. The convertible preferred stock will be redeemable at Westwood One's option after 57 months.
The investor will also receive four-year warrants in three tranches for 10 million common shares, with warrants for 3.33 million shares exercisable at $5.00 per share, warrants for 3.33 million shares exercisable at $6.00 per share and warrants for 3.34 million shares exercisable at $7.00 per share.
The company may reduce the amount of convertible preferred stock to be sold by up to one-third on or before March 31. If the investment is reduced, the amount of warrants Gores would receive would also be reduced by the same percentage and allocated proportionately among the three tranches.
New York-based Westwood One supplies radio and television stations with information services and programming.
| Issuer: | Westwood One, Inc.
|
| Issue: | Series A convertible preferred stock, common stock
|
| Amount: | $100 million (maximum)
|
| Warrants: | For 10 million common shares
|
| Warrant expiration: | Four years
|
| Warrant strike price: | $5.00 (for 3.33 million shares), $6.00 (for 3.33 million shares) and $7.00 (for 3.34 million shares)
|
| Investor: | The Gores Group, LLC
|
| Pricing date: | Feb. 25
|
| Stock symbol: | NYSE: WON
|
| Stock price: | $1.80 at close Feb. 22
|
|
|
| Preferred stock
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| Amount: | $50 million (minimum), $75 million (maximum)
|
| Conversion price: | $3.00
|
| Dividend: | 7.5%
|
|
|
| Common stock
|
| Amount: | $25 million (maximum)
|
| Shares: | 14,285,714
|
| Price: | $1.75
|
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