/NOT FOR DISTRIBUTION OR DISSEMINATION INTO
THE UNITED STATES OR THROUGH
U.S. NEWSWIRE SERVICES/
HALIFAX, Oct. 9, 2019 /CNW/ - DHX Media Ltd. (dba
WildBrain) ("WildBrain" or the "Company") (TSX: DHX, NASDAQ: DHXM)
today announced that it is offering rights (the "Rights Offering")
to eligible holders of its common voting shares ("Common Voting
Shares") and variable voting shares ("Variable Voting Shares" and,
together with the Common Voting Shares, "Voting Shares") of record
at the close of business on October 18,
2019 (the "Record Date").
Pursuant to the Rights Offering, each holder of Voting Shares
will receive one right (a "Right") for each Voting Share held.
Every 3.757635354 Rights will entitle the holder to subscribe for
one whole Voting Share of the Company at a price of C$1.67 per Voting Share (the "Subscription
Price").
The Company has entered into a standby purchase agreement (the
"Standby Purchase Agreement") with Fine Capital Partners, L.P., as
investment manager on behalf of certain of the funds it manages
("Fine Capital" and the "Standby Purchaser") whereby Fine Capital
has agreed to acquire any Voting Shares that are not taken up by
holders of Rights, so that a total of 35,928,144 Voting Shares will
be issued under the Rights Offering (the "Standby Commitment").
Pursuant to the Standby Purchase Agreement, and in consideration
solely for the Standby Commitment, the Company has agreed to pay to
Fine Capital a fee equal to $1.5
million (the "Standby Fee"). The Standby Fee will be paid in
cash upon the completion of the Rights Offering.
WildBrain expects to raise gross proceeds of C$60 million from the Rights Offering and intends
to use $50 million of the proceeds to
reduce the Company's term loan, and the remaining $10 million less offering expenses for general
working capital purposes. As a result of this debt repayment, the
Company's net leverage ratio1 as at June 30, 2019 would be reduced from 5.92x to
approximately 5.40x on a pro forma basis.
The Rights will trade on the Toronto Stock Exchange under the
symbol DHX.RT commencing on October 17,
2019, and will cease trading at 12:00
p.m. (Toronto time) on
November 15, 2019. The ex-rights
trading date for the Voting Shares on the Toronto Stock Exchange
will be October 17, 2019. The
ex-rights trading date on the NASDAQ for the value receivable by
ineligible shareholders for the Rights will be October 17, 2019. This means that Voting Shares
purchased on or following October 17,
2019 will not be entitled to receive Rights under the Rights
Offering. The Rights will not be listed and posted for trading on
the NASDAQ. Rights are exercisable until 5:00 p.m. (Toronto time) on November 15, 2019 (the "Expiry Time"), after
which time unexercised Rights will be void and of no value.
Shareholders must hold at least 3.757635354 Voting Shares to
exercise their Rights, as no fractional Voting Shares will be
issued.
The Rights Offering includes an additional subscription
privilege under which eligible holders of Rights who fully exercise
their Rights will be entitled to subscribe for additional Voting
Shares, if available, that are not otherwise subscribed for in the
Rights Offering. Holders exercising their Rights will receive
Common Voting Shares if they are Canadian (as defined under the
Broadcasting Act (Canada)),
and Variable Voting Shares if they are non-Canadian.
There are currently 135,004,863 Voting Shares outstanding.
Following completion of the Rights Offering, WildBrain expects that
there will be approximately 170,933,007 Voting Shares outstanding,
on a non-diluted basis.
The Rights Offering will be conducted only in the provinces and
territories of Canada (the
"Eligible Jurisdictions"). Accordingly, and subject to the detailed
provisions of a Rights Offering circular (the "Circular"), Rights
will not be delivered to, nor will they be exercisable by, persons
resident outside of the Eligible Jurisdictions unless such holders
can establish that the transaction is exempt under applicable
legislation. Rather, such Rights may be sold on their behalf. If
you are a holder of Common Voting Shares and reside outside of
Canada, please review the
Company's Rights Offering notice (the "Notice"), Circular and
notice to ineligible shareholders to determine your eligibility and
the process and timing requirements to receive and exercise your
Rights.
Details of the Rights Offering will be set out in a Notice and
Circular, which are available under the Company's profile on SEDAR
at www.sedar.com. The Notice and accompanying Rights certificate
(the "Rights Certificate") will be mailed to each eligible
shareholder of WildBrain as at the Record Date. To subscribe,
Registered shareholders must forward the completed Rights
Certificate, together with the applicable funds, to the depositary
and subscription agent, Computershare Investor Services, Inc.,
prior to the Expiry Time. Shareholders who own their Voting Shares
through an intermediary, such as a bank, trust company, securities
dealer or broker, will receive materials and instructions from
their intermediary.
The Rights and the Voting Shares issuable upon exercise of the
Rights have not been, and will not be, registered under the United
States Securities Act of 1933, as amended, and accordingly, the
Rights and the Voting Shares are not being publicly offered for
sale in the "United States" or to
"U.S. persons" (as such terms are defined in Regulation S under the
United States Securities Act of 1933, as amended). This press
release does not constitute an offer to sell or the solicitation of
an offer to buy the securities in any jurisdiction. There shall be
no sale of the securities in any jurisdiction in which an offer to
sell, a solicitation of an offer to buy or a sale would be
unlawful.
1.
|
The net leverage
ratio calculation is based on the definition in the Company's
senior secured credit agreement available on SEDAR at
www.sedar.com.
|
About WildBrain
At WildBrain we make great content for kids and families. With
over 13,000 half-hours of filmed entertainment in our library – one
of the world's most extensive – we are home to such brands as
Peanuts, Teletubbies, Strawberry Shortcake,
Caillou, Inspector Gadget and Degrassi. Our
shows are seen in more than 150 countries on over 500 telecasters
and streaming platforms. Our AVOD business – WildBrain Spark
– offers one of the largest networks of kids' channels on YouTube,
with over 109 million subscribers. We also license consumer
products and location-based entertainment in every major territory
for our own properties as well for our clients and content
partners. Our television group owns and operates four family
entertainment channels that are among the most-viewed in
Canada. WildBrain is headquartered
in Canada with offices worldwide
and trades on the Toronto Stock Exchange (DHX) and the NASDAQ
(DHXM). Visit us at www.wildbrain.com.
On September 23, 2019, DHX
Media Ltd. announced it is rebranding as "WildBrain".
Forward-Looking Statements
This news release contains "forward-looking information" within
the meaning of applicable securities laws. Forward-looking
information can be identified by words such as: "expect", "intend,"
"plan," "seek," "believe," "estimate," "future," "likely," "may,"
"should," "will" and similar forward-looking language. The expected
proceeds to be raised under the Rights Offering and the use thereof
constitutes forward-looking information. The forward-looking
information contained in this news release is based on a number of
assumptions which we believe to be reasonable, including
assumptions relating to the completion of the Rights Offering and
the timing thereof, the completion of the Standby Commitment in
accordance with its terms, the amount of proceeds raised, the
expected use of proceeds and the Company's net leverage ratio as a
result of the reduction of its term loan in connection with the
Rights Offering. Forward-looking information entails various risks
and uncertainties that could cause actual results to differ
materially from those expressed or implied in such forward-looking
information. Risks that could cause actual results to differ
materially from those expressed or implied in the forward-looking
information contained in this press release include, but are not
limited to, that shareholders will not exercise all or any portion
of the Rights, that the Company may not be able to find a suitable
use of the proceeds of the Rights Offering, the level of dilution
that will be experienced by shareholders who do not exercise all or
a portion of their Rights, failure of the Standby Purchaser to
fulfill its obligations under the Standby Purchase Agreement,
failure to complete or a delay in the Rights Offering for any other
reason, the lack of a trading market for the Rights developing and
the trading price of the Voting Shares following completion of the
offering. In addition, general risks relating to capital markets,
economic conditions, regulatory changes, as well as the operations
of our business may also cause actual results to differ materially
from those expressed or implied in such forward-looking
information. Forward-looking information is not a guarantee of
future performance, and management's assumptions upon which such
forward-looking information are based may prove to be incorrect.
Investors are cautioned not to place undue reliance on any
forward-looking information contained herein. The Company disclaims
any obligation to update or revise any forward-looking information
contained in this news release, whether as a result of new
information, future events or otherwise, except to the extent
required by law.
SOURCE DHX Media Ltd. (dba WildBrain)