Technology

AirMedia Group Inc. (ADR) (NASDAQ:AMCN) Inches Closer To Privatization

AirMedia Group Inc. (ADR)(NASDAQ:AMCN)

AirMedia Group Inc. (ADR) (NASDAQ:AMCN)

AirMedia Group Inc. (ADR)(NASDAQ:AMCN) fell 2.67% after announcing it has entered into amendment No. 5 as part of its Agreement and Plan of Merger dated September 29, 2015. Pursuant to the merger agreement, AirMedia Holdings and AirMedia Merger Co. have agreed to provide a cash escrow or letter of credit for the payment of the parent termination fee.

Merger Agreement

AirMedia Group Inc. (ADR) (NASDAQ:AMCN) stock is currently trading in a downtrend after struggling to rise above $2.80. The stock is down by more than 10% for the year

The leading operator of out-of-home advertising platforms in China entered into a definitive agreement and Plan of Merger with AirMedia Holdings (Parent) and AirMedia Merger Company Limited (Merger Sub) in 2015. Pursuant to the agreement, the Parent agreed to acquire AirMedia Group Inc. (ADR) (NASDAQ:AMCN) for $3 per ordinary share or $6 per American Depository Share.

The bid at the time represented a 70% premium. The Buyer Group is led by Mr. Herman Guo Man, Ms. Dan Shao, and Mr. Qing Xu owning AirMedia. The Buyer Group has since agreed to provide real properties owned by one member as an alternative collateral and security to the Merger agreement.

“The Company cautions its shareholders and others considering trading in the Company’s securities that the availability of the Buyer Group’s funding for the proposed transaction is subject to various conditions. There can be no assurance that all of the funding conditions will be satisfied or that the proposed transaction will be consummated,” AirMedia in a statement.

Amendment No 4

In July, AirMedia Group Inc. (ADR) (NASDAQ:AMCN) entered into Amendment No 4 as part of a transaction which when complete will take the company private. Pursuant to the agreement, the Parent agreed to acquire all outstanding shares of the company not already owned by Mr. Man, Ms. Shao, and Mr. Xu.

The Buyer group also agreed to fund the transaction with proceeds from a loan facility provided by China Merchants Bank Co Ltd pursuant to a debt commitment letter dated Jul 31, 2017. The parties also agreed to increase the parent termination fee from $5.32 million to $10. 64 million.

AirMedia Group Inc. (ADR) (NASDAQ:AMCN) and its subsidiary have since agreed to facilitate the satisfaction of all funding conditions under the Debt Commitment Letter. The termination date of the Merger Agreement has been extended to December 31, 2017.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

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James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

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