Virgin Media Inc. (“Virgin Media”) VMED today announced
that in connection with the closing of the transactions contemplated by the
Agreement and Plan of Merger, dated as of February 5, 2013 (as amended, the
“Merger Agreement”), among Virgin Media, Liberty Global, Inc. and Liberty
Global plc (“Liberty Global”), among others, Virgin Media has delivered a
notice (the “Notice”) to holders of its 6.50% convertible senior notes due
2016 (the “Convertible Notes”), pursuant to the indenture governing the
Convertible Notes (as supplemented, the “Indenture”), notifying holders that a
“Fundamental Change” and a “Make-Whole Fundamental Change,” each as defined in
the Indenture, has occurred effective as of June 7, 2013.
In connection with the Mergers, on June 7, 2013, Virgin Media and Liberty
Global entered into a supplemental indenture with The Bank of New York Mellon,
as trustee, pursuant to which, among other things, Liberty Global agreed to
issue and deliver its Class A ordinary shares and Class C ordinary shares to
fulfill the conversion obligation of Virgin Media as specified in the
Indenture. Accordingly, as a result of the Fundamental Change, holders of the
Notes have the right to exchange their Convertible Notes, subject to the terms
and conditions of the Indenture, for 13.4339 Liberty Global class A ordinary
shares, 10.0132 Liberty Global class C ordinary shares and $910.51 in cash
(without interest) per $1,000 in principal amount of Convertible Notes (the
“Reference Property”).
Because the transactions contemplated by the Merger Agreement also constitute
a “Make-Whole Fundamental Change” under the Indenture, if a holder of the
Convertible Notes exchanges the Convertible Notes at any time from June 7,
2013 to, and including, the business day immediately prior to the related
Fundamental Change Repurchase Date (as defined in the Indenture) (the
“Make-Whole Exchange Period”), such holder would instead receive, subject to
the terms and conditions of the Indenture, 13.8302 Class A ordinary shares of
the Company, 10.3271 Class C ordinary shares of the Company and $937.37 in
cash (without interest) for each $1,000 in principal amount of Convertible
Notes exchanged. The Fundamental Change Repurchase Date will be specified by
the Company in a Fundamental Change Repurchase Right Notice that will be
delivered to holders pursuant to Section 11.01 of the Indenture and will be a
date that is not less than 20 nor more than 35 days following the date of the
Fundamental Change Repurchase Right Notice. A holder that elects to convert
Convertible Notes after the Make-Whole Exchange Period, to the extent then
convertible, would receive only the Reference Property.
Under the Indenture, Virgin Media has the option to settle any conversion in
the form of merger consideration described above, cash or a combination of
such consideration. Virgin Media currently intends to settle a conversion of
Convertible Notes with merger consideration as provided above.
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