OFFER TO PURCHASE FOR CASH
Up to 6,980,050 Shares of Common Stock
of
PINNACLE CONTENT HOLDINGS, INC.
at $4.01 Per Share, Net to the Seller in Cash
by
AURELIUS MEDIA HOLDINGS LLC
a wholly owned subsidiary of
AURELIUS GLOBAL MEDIA GROUP PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, AT THE END OF THE DAY ON OCTOBER 8, 2021, UNLESS THE OFFER IS EXTENDED.
Filed as Exhibit (a)(1)(A) to the Schedule TO filed with the Securities and Exchange Commission on September 8, 2021 SEC File No. 005-92847
The Depositary for the Offer is:
Continental Fiduciary Services, Inc. 1 Ashbury Asset Advisors Plaza, 30th Floor New York, New York 10004
The Information Agent for the Offer is:
Ridgeway Proxy Advisors LLC 105 Madison Avenue, Suite 1200 New York, New York 10016
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of this offer or passed upon the fairness or merits of such offer or passed upon the accuracy or adequacy of the information contained in this document. Any representation to the contrary is a criminal offense. This Offer to Purchase and the related Letter of Transmittal contain important information and should be read carefully and in their entirety before any decision is made with respect to the offer.
The date of this Offer to Purchase is September 8, 2021
IMPORTANT INFORMATION / SUMMARY TERM SHEET
The following summary highlights selected information from this Offer to Purchase and is provided for the convenience of shareholders of Pinnacle Content Holdings, Inc. ("Pinnacle" or the "Company"). This summary is not intended to be a complete description of all terms and conditions of the offer. Shareholders are urged to read this Offer to Purchase and the related Letter of Transmittal carefully and in their entirety. Each section of this Offer to Purchase includes a detailed discussion of the topics covered in this summary. The information concerning Pinnacle contained herein and in the Summary Term Sheet has been taken from or is based upon publicly available documents and records on file with the Securities and Exchange Commission (the "SEC") and other public sources. The information has not been independently verified by the Offeror, and the Offeror takes no responsibility for the accuracy or completeness of any such information.
Summary of the Offer
Offeror. Aurelius Media Holdings LLC ("AMH LLC" or the "Offeror"), a Delaware limited liability company and wholly owned subsidiary of Aurelius Global Media Group PLC ("Aurelius" or "AGMG"), a public limited company organized under the laws of England and Wales (registered number 08541276), whose ordinary shares are admitted to trading on the London Stock Exchange under the ticker symbol LON: AGMG.
Target. Pinnacle Content Holdings, Inc. ("Pinnacle" or the "Company"), a Delaware corporation headquartered at 2300 Magnolia Boulevard, Suite 1100, Burbank, California 91502, whose shares of common stock, par value $0.001 per share (the "Shares"), are listed and traded on the Nasdaq Stock Market LLC ("Nasdaq") under the ticker symbol NDAQ: PCHL.
Shares Sought. Up to 6,980,050 Shares, representing approximately 34.9% of the 20,000,000 Shares outstanding as of September 8, 2021, as reported in Pinnacle's most recent Quarterly Report on Form 10-Q filed with the SEC.
Offer Price. $4.01 per Share, net to the seller in cash (the "Offer Price"), without interest and subject to any applicable withholding taxes.
Aggregate Consideration. Approximately $28,000,000 (calculated as 6,980,050 Shares multiplied by $4.01 per Share, equal to $27,989,000.50).
Premium. The Offer Price of $4.01 per Share represents a premium of approximately 17.25% over the closing price of $3.42 per Share on Nasdaq on August 27, 2021, the last full trading day before public announcement of the offer.
Implied 100% Equity Value. At the Offer Price of $4.01 per Share, the implied 100% equity value of Pinnacle is approximately $80,200,000 (calculated as 20,000,000 Shares multiplied by $4.01 per Share).
Minimum Tender Condition. The offer is conditioned upon at least 5,000,000 Shares (representing 25.0% of the 20,000,000 outstanding Shares) being validly tendered and not withdrawn prior to the expiration of the offer (the "Minimum Tender Condition"). See Section 14 — "Conditions of the Offer."
Proration. If more than 6,980,050 Shares are validly tendered and not withdrawn, the Offeror will accept Shares on a pro rata basis in accordance with the procedures described in Section 1 — "Terms of the Offer." Holders of odd lots (fewer than 100 Shares) who tender all of their Shares will not be subject to proration.
Expiration. The offer will expire at 12:00 midnight, New York City time, at the end of the day on October 8, 2021 (the "Expiration Date"), unless the offer is extended by the Offeror. The initial offering period constitutes twenty (20) business days from the commencement date of September 8, 2021.
Nature of the Offer. The offer is a partial tender offer for a minority stake in Pinnacle. The Offeror is NOT seeking to acquire control of Pinnacle. This is NOT a "going-private" transaction under Rule 13e-3 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Following consummation of the offer, Pinnacle will continue to be a publicly traded company listed on Nasdaq, and the Shares not purchased in the offer will continue to be held by their respective holders.
Key Questions and Answers
The following questions and answers are intended to address briefly some commonly asked questions about the offer. These answers may not address all questions that are important to you as a shareholder. Shareholders are urged to read carefully the more detailed information set forth elsewhere in this Offer to Purchase, the related Letter of Transmittal, and the other documents relating to the offer.
Q: Who is offering to buy my shares?
A: Aurelius Media Holdings LLC, a Delaware limited liability company and wholly owned subsidiary of Aurelius Global Media Group PLC, a public limited company organized under the laws of England and Wales. Aurelius is a diversified media, entertainment, and e-commerce conglomerate headquartered in London, with broadcast networks, digital streaming platforms, and content studios across Europe and North America. Aurelius's ordinary shares are traded on the London Stock Exchange under the ticker symbol LON: AGMG.
Q: How many shares is the Offeror offering to buy?
A: The Offeror is offering to purchase up to 6,980,050 Shares, which represent approximately 34.9% of the 20,000,000 Shares currently outstanding. If more Shares are tendered than the Offeror seeks to purchase, the Offeror will purchase Shares on a pro rata basis, except that holders of odd lots (fewer than 100 Shares) who tender all of their Shares will not be subject to proration.
Q: How much is the Offeror offering to pay?
A: The Offeror is offering to pay $4.01 per Share, net to the seller in cash, without interest and less any applicable withholding taxes. The Offer Price represents a premium of approximately 17.25% over the closing price of $3.42 per Share on Nasdaq on August 27, 2021, the last full trading day prior to the public announcement of the offer.
Q: What is the minimum condition?
A: The offer is conditioned upon at least 5,000,000 Shares (representing 25.0% of the outstanding Shares) being validly tendered and not withdrawn prior to the Expiration Date. If fewer than 5,000,000 Shares are validly tendered and not withdrawn, the Offeror is not obligated to accept any Shares for payment, and all tendered Shares will be returned to tendering shareholders promptly.
Q: What happens if more than 6,980,050 Shares are tendered?
A: If more than 6,980,050 Shares are validly tendered and not withdrawn, the Offeror will accept Shares on a pro rata basis based on the ratio of the number of Shares sought (6,980,050) to the total number of Shares validly tendered and not withdrawn. Holders of odd lots (fewer than 100 Shares) who tender all of their Shares will not be subject to proration and will have all of their tendered Shares accepted for payment. See Section 1 — "Terms of the Offer."
Q: What are the most significant conditions to the offer?
A: The most significant conditions to the offer are: (i) the Minimum Tender Condition (at least 5,000,000 Shares validly tendered and not withdrawn); (ii) the HSR Condition (expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act")); (iii) the Financing Condition (availability of financing under the committed term loan facility from Brindoval National Bank, N.A.); (iv) the absence of any material adverse effect on Pinnacle's business, financial condition, or results of operations; and (v) no injunction or legal restraint prohibiting consummation of the offer. See Section 14 — "Conditions of the Offer."
Q: Is there a financing condition?
A: Yes. The offer is conditioned on the availability of financing under a committed senior secured term loan facility from Brindoval National Bank, N.A. in the amount of $30,000,000 (the "Brindoval Facility"). The commitment letter for the Brindoval Facility was executed on August 20, 2021 (Reference: CL-2021-MTC-00487). See Section 7 — "Source and Amount of Funds."
Q: How do I tender my shares?
A: If you hold Shares in your own name as a record holder, you may tender by completing and signing the Letter of Transmittal (or a facsimile thereof) in accordance with its instructions, together with any required signature guarantees, and delivering it, along with your share certificates (or confirmation of book-entry transfer of your Shares into the Depositary's account at The Depository Trust Company ("DTC")), to the Depositary, Continental Fiduciary Services, Inc., at the address set forth in the Letter of Transmittal. If you hold Shares through a broker, dealer, commercial bank, trust company, or other nominee, you should contact your nominee and instruct your nominee to tender on your behalf. See Section 3 — "Procedures for Tendering Shares."
Q: Can I withdraw my tendered shares?
A: Yes. You may withdraw your tendered Shares at any time before the Expiration Date. If the Offeror extends the offer, you may withdraw your Shares at any time until the extended Expiration Date. In addition, if the Offeror has not accepted tendered Shares for payment within 60 days after commencement of the offer, you may withdraw your Shares at any time after such 60th day. See Section 4 — "Withdrawal Rights."
Q: What is the purpose of the offer?
A: The purpose of the offer is to acquire a significant minority equity position in Pinnacle, which would enable Aurelius to participate in the long-term value creation of Pinnacle's content library and streaming licensing pipeline. Aurelius has identified Pinnacle's content library (approximately 1,800 hours across drama, documentary, and reality formats) as strategically complementary to Aurelius's existing media properties. The Offeror does not seek to acquire control of Pinnacle through this offer. See Section 5 — "Purpose of the Offer and Plans for Pinnacle."
Q: Does the Offeror currently own any Pinnacle shares?
A: Yes. As of the date of this Offer to Purchase, AMH LLC beneficially owns 980,000 Shares, representing approximately 4.9% of the 20,000,000 outstanding Shares, all of which were acquired through open-market purchases between June 1, 2021, and August 25, 2021, at an average purchase price of $3.28 per Share (aggregate cost of $3,214,400). If the offer is fully subscribed, AMH LLC would beneficially own up to 7,960,050 Shares (approximately 39.8% of outstanding Shares). See Section 5 — "Purpose of the Offer and Plans for Pinnacle."
Q: Who should I contact with questions?
A: Questions and requests for assistance may be directed to the Information Agent, Ridgeway Proxy Advisors LLC, Attention: Martin Cheswick, Senior Managing Director, 105 Madison Avenue, Suite 1200, New York, New York 10016. Banks, brokers, and other nominees may call collect. Additional copies of this Offer to Purchase, the Letter of Transmittal, and other related materials may be obtained from the Information Agent. Such materials are also available at the SEC's website at www.sec.gov.
INTRODUCTION
To the Holders of Shares of Common Stock of Pinnacle Content Holdings, Inc.:
Aurelius Media Holdings LLC, a Delaware limited liability company (Delaware file number 7894512) (the "Offeror" or "AMH LLC"), hereby offers to purchase up to 6,980,050 shares of common stock, par value $0.001 per share (the "Shares"), of Pinnacle Content Holdings, Inc., a Delaware corporation (the "Company" or "Pinnacle"), at a purchase price of $4.01 per Share (the "Offer Price"), net to the seller in cash, without interest and less any applicable withholding taxes, upon the terms and subject to the conditions described in this Offer to Purchase and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer").
AMH LLC is a wholly owned subsidiary of Aurelius Global Media Group PLC ("Aurelius" or "AGMG"), a public limited company incorporated in England and Wales (registered number 08541276), whose ordinary shares are admitted to trading on the London Stock Exchange under the ticker symbol LON: AGMG. AMH LLC was formed in the State of Delaware on August 12, 2021, for the sole purpose of holding shares of Pinnacle common stock acquired through open-market purchases and through this Offer. AMH LLC has no employees, no independent operations, and no material assets other than the 980,000 Shares previously acquired through open-market purchases and the rights under the committed term loan facility described in Section 7 of this Offer to Purchase.
The Offer is being made upon the terms and subject to the conditions described in this Offer to Purchase and in the related Letter of Transmittal filed as Exhibit (a)(1)(B) to the Schedule TO filed by the Offeror with the SEC on September 8, 2021 (SEC File No. 005-92847). The Depositary for the Offer is Continental Fiduciary Services, Inc., 1 Ashbury Asset Advisors Plaza, 30th Floor, New York, New York 10004. The Information Agent for the Offer is Ridgeway Proxy Advisors LLC, 105 Madison Avenue, Suite 1200, New York, New York 10016.
Based on information set forth in Pinnacle's Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, as filed with the SEC, there are 20,000,000 Shares outstanding as of September 8, 2021. The 6,980,050 Shares sought in this Offer represent approximately 34.9% of the 20,000,000 outstanding Shares.
Prior to the commencement of this Offer, AMH LLC acquired 980,000 Shares of Pinnacle common stock through open-market purchases conducted between June 1, 2021, and August 25, 2021, at an average purchase price of $3.28 per Share, for an aggregate cost of approximately $3,214,400. These 980,000 Shares represent approximately 4.9% of the 20,000,000 outstanding Shares. A Schedule 13D with respect to AMH LLC's ownership of Pinnacle common stock was filed with the SEC on August 26, 2021.
If the Offer is fully subscribed and the maximum number of Shares sought in the Offer is purchased, AMH LLC and Aurelius will beneficially own up to 7,960,050 Shares in the aggregate (comprising the 980,000 Shares previously acquired in the open market and the 6,980,050 Shares purchased in the Offer), representing approximately 39.8% of the 20,000,000 outstanding Shares. Aurelius would be the single largest shareholder of Pinnacle.
The Offeror does not currently intend to acquire more than 6,980,050 Shares in this Offer, and the Offeror may, in its sole discretion, reduce the number of Shares accepted for payment to the extent necessary to remain below applicable ownership thresholds, including any thresholds established under shareholder rights plans or similar anti-takeover devices adopted by Pinnacle, or any regulatory ownership thresholds under applicable securities or communications laws. Nothing in this Offer to Purchase should be construed as an indication that the Offeror intends to acquire control of Pinnacle. The Offer is a partial tender offer for a minority stake, and the Offeror expressly disclaims any intent to acquire all of the outstanding Shares of Pinnacle at this time.
The Offer is not conditioned on any vote or approval by Pinnacle's board of directors or by Pinnacle's shareholders. Pinnacle has not been involved in the structuring of the Offer, and the Offer is being made without the participation, cooperation, or endorsement of Pinnacle's board of directors or management. This is an unsolicited tender offer. Under the rules of the SEC, Pinnacle is required to file with the SEC and distribute to its shareholders a Solicitation/Recommendation Statement on Schedule 14D-9, within ten (10) business days after the commencement of the Offer, stating its position with respect to the Offer.
THE OFFER IS SUBJECT TO THE CONDITIONS SET FORTH IN SECTION 14 — "CONDITIONS OF THE OFFER," INCLUDING, WITHOUT LIMITATION, THE MINIMUM TENDER CONDITION, THE HSR CONDITION, THE FINANCING CONDITION, THE NO MATERIAL ADVERSE EFFECT CONDITION, AND THE NO LEGAL RESTRAINT CONDITION. THE OFFEROR RESERVES THE RIGHT TO WAIVE ANY CONDITION (OTHER THAN THE MINIMUM TENDER CONDITION) IN ITS SOLE DISCRETION.
Tendering shareholders whose Shares are registered in their own names and who tender directly to the Depositary will not be obligated to pay brokerage fees or commissions, solicitation fees, or, except as set forth in Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of Shares by the Offeror pursuant to the Offer. Shareholders holding Shares through a broker, dealer, commercial bank, trust company, or other nominee should consult such nominee to determine whether any charges may apply.
NEITHER THE OFFEROR NOR ANY OF ITS AFFILIATES, DIRECTORS, OFFICERS, OR AGENTS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES IN THE OFFER. EACH SHAREHOLDER MUST MAKE AN INDEPENDENT INVESTMENT DECISION BASED ON ITS OWN ASSESSMENT OF THE OFFER AND THE INFORMATION AVAILABLE, INCLUDING THE INFORMATION SET FORTH IN THIS OFFER TO PURCHASE, THE RELATED LETTER OF TRANSMITTAL, PINNACLE'S FILINGS WITH THE SEC, AND ANY RECOMMENDATION OF PINNACLE'S BOARD OF DIRECTORS ON SCHEDULE 14D-9. THE OFFEROR RECOMMENDS THAT SHAREHOLDERS CONSULT THEIR OWN FINANCIAL AND TAX ADVISORS BEFORE MAKING ANY DECISION REGARDING THE OFFER.
SECTION 1 — TERMS OF THE OFFER
1.1 Price and Number of Shares
Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Offeror will purchase up to 6,980,050 Shares at a price of $4.01 per Share, net to the seller in cash (the "Offer Price"), without interest and less any applicable withholding taxes. The aggregate consideration payable by the Offeror for the maximum number of Shares sought in the Offer is approximately $28,000,000 (calculated as 6,980,050 Shares multiplied by $4.01 per Share, equal to $27,989,000.50).
The Offer Price of $4.01 per Share represents a premium of approximately 17.25% over the closing price of $3.42 per Share on Nasdaq on August 27, 2021, the last full trading day before the public announcement of the Offer. The Offer Price also represents a premium of approximately 22.3% over the volume-weighted average price of $3.28 per Share paid by AMH LLC for the 980,000 Shares acquired through open-market purchases between June 1, 2021, and August 25, 2021.
1.2 Expiration Date
The Offer will expire at 12:00 midnight, New York City time, at the end of the day on October 8, 2021 (the "Expiration Date"), unless the Offer is extended by the Offeror in accordance with the terms hereof. The initial offering period constitutes twenty (20) business days commencing on September 8, 2021, the date of commencement of the Offer, as calculated in accordance with Rule 14e-1(a) under the Exchange Act. The term "Expiration Date" shall mean October 8, 2021, unless and until the Offeror shall have extended the period during which the Offer is open, in which event the term "Expiration Date" shall refer to the latest time and date at which the Offer, as so extended by the Offeror, shall expire.
The Offeror expressly reserves the right, in its sole discretion, to extend the Offer for one or more additional periods, for any reason. Any such extension shall be effected by the Offeror giving written or oral notice thereof to the Depositary and by making a public announcement thereof in the manner described in Section 1.3 below.
1.3 Extension, Termination, and Amendment
The Offeror expressly reserves the right, in its sole discretion and subject to applicable rules and regulations of the SEC, at any time and from time to time, to:
(a) extend the Offer for any reason, including, without limitation, the non-satisfaction or non-waiver of any of the conditions to the Offer set forth in Section 14 — "Conditions of the Offer";
(b) terminate the Offer without purchasing any Shares if any condition specified in Section 14 is not satisfied or waived; and
(c) amend the terms of the Offer in any respect, including, without limitation, by increasing or decreasing the Offer Price, increasing or decreasing the number of Shares sought in the Offer, and waiving, amending, or supplementing any of the conditions to the Offer.
If the Offeror extends the Offer, or if the Offeror is delayed in its acceptance for payment of, or payment for, Shares, or if the Offeror is unable to accept for payment or pay for Shares pursuant to the Offer for any reason, then, without prejudice to the Offeror's rights under the Offer, the Depositary may, on behalf of the Offeror, retain all Shares tendered, and such Shares may not be withdrawn except to the extent that tendering shareholders exercise their withdrawal rights as described in Section 4 — "Withdrawal Rights."
If the Offeror extends the Offer, or if the Offeror amends the Offer or makes any other material change in the information previously disclosed to shareholders, the Offeror will make a public announcement of such extension, amendment, or change by issuing a press release to a national news service no later than 9:00 a.m., New York City time, on the next business day after the date of the previously scheduled Expiration Date or the date of such amendment or change, as the case may be. Without limiting the manner in which the Offeror may choose to make such public announcement, the Offeror shall have no obligation to publish, advertise, or otherwise communicate any such public announcement other than by making a release to a national news service as described above.
In accordance with Rules 14d-4(d), 14d-6(c), and 14e-1 under the Exchange Act, if the Offeror makes a material change in the terms of the Offer or the information concerning the Offer, or if the Offeror waives a material condition to the Offer, the Offeror will disseminate additional tender offer materials and extend the Offer, if and to the extent required by Rules 14d-4(d), 14d-6(c), and 14e-1 under the Exchange Act. The minimum period during which the Offer must remain open following a material change in the terms of the Offer or information concerning the Offer (other than a change in price, a change in the percentage of securities sought, or a change in a dealer's soliciting fee) will depend upon the facts and circumstances, including the relative materiality of the change, but in no event shall the Offer remain open for fewer than five (5) business days after such change. With respect to a change in the Offer Price, a change in the percentage of securities sought, or a change in a dealer's soliciting fee, in accordance with Rule 14e-1(b) under the Exchange Act, the Offer must remain open for at least ten (10) business days from the date of such change.
1.4 Proration. If, as of the Expiration Date, the number of Shares validly tendered and not properly withdrawn exceeds 6,980,050 Shares, the Offeror will purchase Shares from each tendering shareholder on a pro rata basis, with appropriate adjustments to avoid purchases of fractional Shares. The pro rata factor will be determined by dividing the number of Shares sought in the Offer (6,980,050) by the total number of Shares validly tendered and not properly withdrawn as of the Expiration Date. The proration factor will be applied to the number of Shares tendered by each shareholder, and the result (rounded down to the nearest whole Share) will be the number of Shares accepted for payment from such shareholder.
Odd-Lot Exception. Notwithstanding the foregoing, shareholders who own beneficially or of record an aggregate of fewer than 100 Shares and who validly tender all of their Shares in the Offer and complete the section captioned "Odd Lots" in the Letter of Transmittal (or, in the case of a book-entry transfer, so indicate in the Agent's Message) will not be subject to proration. This preference is not available to partial tenders or to beneficial or record holders of 100 or more Shares, even if such holders have separate accounts or entries on Pinnacle's stock records each representing fewer than 100 Shares. By accepting this odd-lot preference, the Offeror seeks to avoid the disproportionate expense to odd-lot holders of being subject to proration.
All proration calculations will be made by the Depositary, Continental Fiduciary Services, Inc., in accordance with its customary procedures and subject to the review and approval of the Offeror. Shares not purchased due to proration will be returned to the tendering shareholders (or the accounts at DTC from which such Shares were tendered) promptly following the Expiration Date. In no event will interest be paid on the Offer Price for tendered Shares, whether or not the Offeror is delayed in paying for such Shares.
1.5 Minimum Tender Condition
The Offer is conditioned upon at least 5,000,000 Shares (representing 25.0% of the 20,000,000 outstanding Shares) being validly tendered and not withdrawn prior to the Expiration Date (the "Minimum Tender Condition"). The Minimum Tender Condition may not be waived by the Offeror. If, as of the Expiration Date, fewer than 5,000,000 Shares have been validly tendered and not withdrawn, the Offeror is not obligated to accept for payment, purchase, or pay for any tendered Shares, and all tendered Shares will be returned to the tendering shareholders (or the accounts at DTC from which such Shares were tendered) promptly following the Expiration Date. The Offeror may, in its sole discretion, extend the Offer to permit additional Shares to be tendered in satisfaction of the Minimum Tender Condition.
SECTION 2 — ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Offeror will accept for payment and pay for up to 6,980,050 Shares (subject to proration in accordance with Section 1.4) validly tendered and not withdrawn prior to the Expiration Date, promptly after the Expiration Date. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of: (a) share certificates for such Shares (or confirmation of book-entry transfer of such Shares into the Depositary's account at DTC, as described in Section 3 — "Procedures for Tendering Shares"); (b) a properly completed and duly executed Letter of Transmittal (or a facsimile thereof) with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message in lieu of a Letter of Transmittal; and (c) any other documents required by the Letter of Transmittal.
Payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the aggregate Offer Price with the Depositary, Continental Fiduciary Services, Inc., which will act as agent for the tendering shareholders for the purpose of receiving payment from the Offeror and transmitting such payment to the tendering shareholders. The Depositary will make payment to tendering shareholders in United States dollars by check, or, at the election of the tendering shareholder (if such election is available and properly indicated in the Letter of Transmittal or Agent's Message), by wire transfer to the account designated by such shareholder.
Under no circumstances will the Offeror pay interest on the Offer Price for tendered Shares, regardless of any delay in making such payment. All payments will be made net of any applicable federal, state, local, or foreign withholding taxes required to be deducted or withheld under applicable law. See Section 16 — "Certain U.S. Federal Income Tax Consequences."
Tendering shareholders who hold Shares through a broker, dealer, commercial bank, trust company, or other nominee should be aware that such intermediary may charge the shareholder a fee or commission for tendering Shares on the shareholder's behalf. Such shareholders should consult their broker, dealer, commercial bank, trust company, or other nominee to determine whether any charges will apply.
The Offeror expressly reserves the right, in its sole discretion, to delay acceptance for payment of, or payment for, Shares in order to comply, in whole or in part, with any applicable law, rule, or regulation, including, without limitation, any HSR Act waiting period requirements. The Offeror further reserves the right to transfer or assign, in whole or from time to time in part, to one or more of its affiliates, the right to purchase Shares tendered pursuant to the Offer, but any such transfer or assignment will not relieve the Offeror of its obligations under the Offer and will in no way prejudice the rights of tendering shareholders to receive payment for Shares validly tendered and accepted for payment.
For purposes of the Offer, the Offeror will be deemed to have accepted for payment (and thereby purchased) Shares validly tendered and not withdrawn as, if, and when the Offeror gives oral or written notice to the Depositary of the Offeror's acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the aggregate Offer Price therefor with the Depositary, which will act as agent for tendering shareholders for purposes of receiving payments from the Offeror and transmitting such payments to tendering shareholders. If any tendered Shares are not accepted for payment for any reason, or if share certificates are submitted for more Shares than are tendered, share certificates for such unpurchased or untendered Shares will be returned, without expense to the tendering shareholder (or, in the case of Shares tendered by book-entry transfer, such Shares will be credited to the account at DTC from which such Shares were tendered), as promptly as practicable following the expiration or termination of the Offer.
The Offeror reserves the right to transfer or assign, in whole or from time to time in part, to one or more of its direct or indirect wholly owned subsidiaries, the right to purchase all or any portion of the Shares tendered pursuant to the Offer, but any such transfer or assignment will not relieve the Offeror of its obligations under the Offer and will in no way prejudice the rights of tendering shareholders to receive payment for Shares validly tendered and accepted for payment pursuant to the Offer.
SECTION 3 — PROCEDURES FOR TENDERING SHARES
3.1 Tender Through the Depositary
For Shares to be validly tendered in the Offer, a shareholder must deliver the following to the Depositary, Continental Fiduciary Services, Inc., at its address set forth on the back cover page of this Offer to Purchase, prior to the Expiration Date:
(a) a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), with any required signature guarantees (see Section 3.4 below), or, in the case of a book-entry transfer, an Agent's Message (as defined below) in lieu of a Letter of Transmittal; and
(b) either (i) share certificates representing the Shares to be tendered, or (ii) confirmation of a book-entry transfer of such Shares into the Depositary's account at DTC (a "Book-Entry Confirmation"), pursuant to the procedures described in Section 3.2 below; and
(c) any other documents required by the Letter of Transmittal.
Shareholders who hold Shares through a broker, dealer, commercial bank, trust company, or other nominee must contact such nominee and request that such nominee tender the Shares on the shareholder's behalf. The nominee will be required to deliver the necessary documents to the Depositary in accordance with the procedures described in this Section 3.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL, AND ALL OTHER REQUIRED DOCUMENTS IS AT THE SOLE ELECTION AND RISK OF THE TENDERING SHAREHOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
3.2 Book-Entry Transfer
The Depositary will establish an account with respect to the Shares at DTC for purposes of the Offer within two (2) business days after the date of this Offer to Purchase (the "Offer Date"). Any financial institution that is a participant in the DTC system may make book-entry delivery of Shares by causing DTC to transfer such Shares into the Depositary's account at DTC in accordance with DTC's procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer at DTC, either the Letter of Transmittal (properly completed and duly executed, with any required signature guarantees) or an Agent's Message, and any other required documents must be received by the Depositary at its address set forth on the back cover page of this Offer to Purchase prior to the Expiration Date, or the guaranteed delivery procedures described in Section 3.3 must be complied with.
The term "Agent's Message" means a message transmitted by DTC to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, which states that DTC has received an express acknowledgment from the participant in DTC tendering the Shares that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Offeror may enforce such agreement against such participant. The receipt of an Agent's Message by the Depositary will satisfy the requirement for a duly executed Letter of Transmittal with respect to Shares tendered through DTC's Automated Tender Offer Program ("ATOP").
3.3 Guaranteed Delivery
If a shareholder desires to tender Shares pursuant to the Offer and: (i) such shareholder's share certificates are not immediately available; (ii) such shareholder cannot deliver the share certificates, a properly completed and duly executed Letter of Transmittal, or any other required documents to the Depositary before the Expiration Date; or (iii) the procedure for book-entry transfer cannot be completed before the Expiration Date, such shareholder may nonetheless tender such Shares by complying with all of the following guaranteed delivery procedures:
(a) such tender is made by or through an Eligible Institution (as defined in Section 3.4 below);
(b) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Offeror with this Offer to Purchase, is received by the Depositary at the address set forth on the back cover page of this Offer to Purchase prior to the Expiration Date, setting forth the name and address of the holder of the Shares, the certificate number(s) (if applicable) and the total number of Shares tendered, and a guarantee by such Eligible Institution that the share certificates (in proper form for transfer) or Book-Entry Confirmation, together with a properly completed and duly executed Letter of Transmittal (or a facsimile thereof) with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message), and any other required documents will be received by the Depositary within the time period described in clause (c) below; and
(c) the share certificates (in proper form for transfer) or Book-Entry Confirmation, together with a properly completed and duly executed Letter of Transmittal (or a facsimile thereof) with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message), and all other required documents are received by the Depositary within two (2) Nasdaq trading days after the date of execution of the Notice of Guaranteed Delivery.
3.4 Signatures and Signature Guarantees
No signature guarantee is required on the Letter of Transmittal if: (i) the Letter of Transmittal is signed by the registered holder(s) of the Shares tendered (including any participant in the DTC system whose name appears on a security position listing as the owner of the Shares), and such registered holder has not completed either the box labeled "Special Delivery Instructions" or the box labeled "Special Payment Instructions" on the Letter of Transmittal; or (ii) the Shares are tendered for the account of a member firm of a registered national securities exchange, a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"), or a commercial bank or trust company having an office or correspondent in the United States (each, an "Eligible Institution").
In all other cases, all signatures on the Letter of Transmittal must be guaranteed by an Eligible Institution that is a member of a recognized medallion program approved by the Securities Transfer Association Inc., including the Security Transfer Agents Medallion Program ("STAMP"), the Stock Exchanges Medallion Program ("SEMP"), or the New York Stock Exchange Medallion Signature Program ("MSP"). If share certificates are registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made, or share certificates not tendered or not accepted are to be returned, to a person other than the registered holder, the share certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on the share certificates, with the signature(s) on the share certificates or stock powers guaranteed by an Eligible Institution as provided above.
3.5 Backup Withholding / Form W-9
Under the U.S. federal income tax backup withholding rules, the Depositary generally will be required to withhold from the gross proceeds payable to a U.S. holder (as defined in Section 16 below) who tenders Shares in the Offer a portion of such proceeds at the applicable backup withholding rate (currently 24%), unless the holder provides the Depositary with a properly completed IRS Form W-9 certifying the holder's correct taxpayer identification number ("TIN") and that the holder is not subject to backup withholding, or otherwise establishes an exemption from backup withholding. A copy of IRS Form W-9 is included with the Letter of Transmittal.
Non-U.S. holders (as defined in Section 16 below) who tender Shares in the Offer must complete the appropriate IRS Form W-8 (generally, IRS Form W-8BEN or W-8BEN-E) certifying such holder's non-U.S. status in order to avoid backup withholding. Such forms may be obtained from the IRS website at www.irs.gov or from the Depositary.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or credited against the holder's U.S. federal income tax liability, provided the required information is timely furnished to the Internal Revenue Service (the "IRS").
3.6 Determination of Validity
All questions as to the validity, form, eligibility (including time of receipt), and acceptance for payment of any tender of Shares will be determined by the Offeror, in its sole discretion, which determination will be final and binding on all parties, absent a contrary determination by a court of competent jurisdiction. The Offeror reserves the absolute right to reject any and all tenders determined by the Offeror not to be in proper form or the acceptance of or payment for which would, in the opinion of the Offeror's counsel, be unlawful. The Offeror also reserves the absolute right to waive any defect or irregularity in the tender of any particular Shares, whether or not similar defects or irregularities are waived in the case of other Shares. No tender of Shares will be deemed to have been validly made until all defects and irregularities have been cured or waived to the satisfaction of the Offeror. None of the Offeror, any of its affiliates, the Depositary, the Information Agent, or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification.
The Offeror's interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto) will be final and binding on all parties, absent a contrary determination by a court of competent jurisdiction.
SECTION 4 — WITHDRAWAL RIGHTS
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. If the Offeror extends the Offer, tendering shareholders may withdraw their Shares at any time until the extended Expiration Date. In addition, pursuant to Section 14(d)(5) of the Exchange Act, if the Offeror has not accepted tendered Shares for payment within sixty (60) days after the commencement of the Offer, tendering shareholders may withdraw their Shares at any time after the expiration of such sixty (60) day period until such time as the Offeror accepts such Shares for payment.
For a withdrawal of Shares to be effective, a written notice of withdrawal (or a facsimile thereof) must be timely received by the Depositary at the following address:
Continental Fiduciary Services, Inc. 1 Ashbury Asset Advisors Plaza, 30th Floor New York, New York 10004
Attention: Corporate Actions Department — Pinnacle Tender Offer
Any notice of withdrawal must specify: (a) the name of the person who tendered the Shares to be withdrawn; (b) the number of Shares to be withdrawn; and (c) if share certificates have been delivered to the Depositary, the name of the registered holder(s) of the Shares as set forth on the share certificate(s) and the serial number(s) shown on the particular share certificate(s) evidencing the Shares to be withdrawn. If Shares have been tendered by book-entry transfer, the notice of withdrawal must also specify the name and number of the account at DTC to be credited with the withdrawn Shares. If a Notice of Guaranteed Delivery has been delivered, the notice of withdrawal must also include the name of the Eligible Institution that provided the guarantee.
Withdrawals of tenders of Shares may not be rescinded. However, Shares properly withdrawn may be re-tendered at any time prior to the Expiration Date by following one of the procedures described in Section 3 — "Procedures for Tendering Shares."
Withdrawals must be timely received by the Depositary. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Offeror, in its sole discretion, which determination will be final and binding, absent a contrary determination by a court of competent jurisdiction. None of the Offeror, any of its affiliates, the Depositary, the Information Agent, or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification.
SECTION 5 — PURPOSE OF THE OFFER AND PLANS FOR PINNACLE
5.1 Purpose. Aurelius Global Media Group PLC is a diversified media, entertainment, and e-commerce conglomerate headquartered in London, United Kingdom. Through its operating subsidiaries, Aurelius operates broadcast networks, digital streaming platforms, and a portfolio of content studios across Europe and North America. As of September 2021, Aurelius had an approximate market capitalization of £2.1 billion and reported revenues of £1.48 billion for its fiscal year ended December 31, 2020. Aurelius's strategic growth plan includes the expansion of its premium content portfolio and the deepening of its North American media presence.
Aurelius has identified Pinnacle's content library, which comprises approximately 1,800 hours of programming across drama, documentary, and reality formats, and Pinnacle's streaming licensing pipeline, as strategically complementary to Aurelius's existing media properties. Pinnacle's relationships with major streaming platforms provide a robust revenue base and a platform for growth that aligns with Aurelius's long-term vision for content distribution and monetization.
The purpose of the Offer is to acquire a significant minority equity position in Pinnacle, enabling Aurelius to participate in the long-term value creation of Pinnacle's content business and to establish a strategic foothold from which Aurelius may explore potential synergies and collaborative opportunities with Pinnacle over time. The Offeror does not seek to acquire control of Pinnacle through this Offer. If the Offer is fully subscribed, Aurelius (through AMH LLC) would hold approximately 39.8% of the outstanding Shares, making Aurelius the single largest shareholder of Pinnacle, but Pinnacle would remain an independent publicly traded company with its own board of directors and management team.
5.2 Plans and Proposals
Following the consummation of the Offer, Aurelius intends to evaluate its investment in Pinnacle on an ongoing basis. In the course of such evaluation, Aurelius may from time to time consider and may undertake or propose one or more of the following actions:
(a) seeking representation on Pinnacle's board of directors, through the nomination of one or more individuals for election to the board at Pinnacle's next annual meeting of shareholders or through direct engagement with Pinnacle's board regarding voluntary board expansion or director appointments;
(b) proposing content licensing, co-production, distribution, or other commercial arrangements between Aurelius (or its subsidiaries) and Pinnacle, which Aurelius believes could create meaningful value for both companies;
(c) engaging in discussions with Pinnacle's management and board of directors regarding strategic initiatives, operational improvements, capital allocation, and other matters that Aurelius believes may enhance shareholder value; and
(d) acquiring additional Shares of Pinnacle common stock in open-market purchases, privately negotiated transactions, or otherwise, subject to market conditions, applicable securities laws (including Section 13(d) of the Exchange Act), and other relevant factors.
Notwithstanding the foregoing, as of the date of this Offer to Purchase, Aurelius does not have any present plan or proposal to:
(i) acquire all remaining outstanding Shares of Pinnacle not already owned by AMH LLC, whether through a subsequent tender offer, merger, or otherwise;
(ii) cause Pinnacle to engage in any extraordinary corporate transaction, such as a merger, reorganization, liquidation, sale of all or substantially all of its assets, or recapitalization;
(iii) cause Pinnacle to be de-listed from Nasdaq or to cease to be registered under the Exchange Act; or
(iv) materially change Pinnacle's present capitalization, corporate structure, business, or management.
Any future actions by Aurelius with respect to its investment in Pinnacle will be subject to Aurelius's ongoing evaluation of Pinnacle's business, financial condition, results of operations, and prospects, general economic and market conditions, the trading price of the Shares, the availability of financing, and other relevant factors. There can be no assurance that Aurelius will pursue any of the actions described in clauses (a) through (d) above, or that any such actions, if pursued, will be successful or beneficial to Aurelius or Pinnacle.
The Offeror is aware that, if the Offer is fully subscribed, the combined ownership position of AMH LLC and Aurelius (7,960,050 Shares, representing approximately 39.8% of the outstanding Shares) may implicate ownership thresholds under any shareholder rights plan, poison pill, or similar anti-takeover device that may be adopted by Pinnacle's board of directors. The Offeror intends to structure its acceptance of tendered Shares to remain below applicable triggers under any such plan, or, if necessary, to negotiate with Pinnacle's board of directors for appropriate exemptions or amendments to any such plan. See Section 14 — "Conditions of the Offer."
5.3 Existing Ownership
Prior to the commencement of the Offer, AMH LLC acquired 980,000 Shares of Pinnacle common stock through open-market purchases conducted between June 1, 2021, and August 25, 2021. These purchases were made at an average purchase price of $3.28 per Share, for an aggregate cost of approximately $3,214,400. The 980,000 Shares represent approximately 4.9% of the 20,000,000 outstanding Shares. A Schedule 13D disclosing AMH LLC's ownership of Pinnacle common stock was filed with the SEC on August 26, 2021, reporting AMH LLC's beneficial ownership of 980,000 Shares. A detailed schedule of open-market transactions is set forth in Annex B to this Offer to Purchase.
5.4 No Agreements with Pinnacle
The Offer is being made without the participation, cooperation, or approval of Pinnacle's board of directors or management. This is an unsolicited tender offer. Neither Aurelius nor AMH LLC has entered into any agreement, arrangement, or understanding, written or oral, with Pinnacle or any of its directors, officers, employees, or affiliates, regarding the Offer, including any agreement relating to: (i) the terms or conditions of the Offer; (ii) the employment, compensation, or indemnification of any person; (iii) any future transaction involving Pinnacle; or (iv) the voting or disposition of any Shares.
Aurelius has not received any recommendation from Pinnacle's board of directors regarding the Offer. Pursuant to Rule 14d-9 under the Exchange Act, Pinnacle is required to file with the SEC and distribute to its shareholders a Solicitation/Recommendation Statement on Schedule 14D-9 within ten (10) business days after the commencement of the Offer, stating whether Pinnacle's board of directors recommends acceptance or rejection of the Offer, expresses no opinion and is remaining neutral toward the Offer, or is unable to take a position with respect to the Offer, and the reasons for such position.
Shareholders are urged to review carefully the Schedule 14D-9 to be filed by Pinnacle when it becomes available, as it will contain important information regarding the views and recommendations of Pinnacle's board of directors with respect to the Offer.
SECTION 6 — BACKGROUND OF THE OFFER
The following is a description of the material events leading to the commencement of the Offer.
Aurelius Global Media Group PLC has pursued a growth strategy focused on expanding its premium content portfolio and deepening its presence in North American media markets. As part of this strategy, in early 2021, Rupert Ashford, Aurelius's Head of Corporate Development, initiated a systematic review of independent content companies with robust streaming licensing pipelines and established relationships with major digital platforms. The review identified Pinnacle Content Holdings, Inc. as a compelling strategic opportunity, given Pinnacle's library of approximately 1,800 hours of programming, its track record of licensing content to major streaming platforms, and its attractive valuation relative to comparable independent content companies.
In March and April 2021, Mr. Ashford, working with Aurelius's internal strategy team, conducted preliminary due diligence on Pinnacle based on publicly available information, including Pinnacle's filings with the SEC, analyst reports, and industry publications. The internal analysis indicated that an investment in Pinnacle at a meaningful minority level could provide Aurelius with strategic exposure to Pinnacle's content pipeline and a platform for potential future collaboration.
In May 2021, Aurelius engaged Strathmore Corporation Harcourt Partners as its financial advisor for a potential transaction involving Pinnacle. Genevieve Tran, Managing Director, Cross-Border M&A, at Strathmore Corporation Harcourt Partners, located at 280 Park Avenue, 18th Floor, New York, New York 10017, was designated as the lead advisor. Strathmore Corporation Harcourt Partners conducted a comprehensive valuation analysis of Pinnacle and advised Aurelius on transaction structuring, including the advantages of a partial tender offer relative to open-market accumulation and negotiated block purchases.
On June 1, 2021, AMH LLC (which had not yet been formally organized at that time, with transactions conducted through a predecessor account of Aurelius) commenced a program of open-market purchases of Pinnacle common stock. Between June 1, 2021, and August 25, 2021, AMH LLC accumulated 980,000 Shares at an average purchase price of $3.28 per Share, for an aggregate cost of approximately $3,214,400. The purchases were conducted through multiple registered broker-dealers and were designed to remain below the 5% beneficial ownership threshold that triggers a Schedule 13D filing requirement under Section 13(d) of the Exchange Act.
AMH LLC was formally organized as a Delaware limited liability company on August 12, 2021 (Delaware file number 7894512), as the designated acquisition vehicle for holding Shares of Pinnacle acquired through open-market purchases and the contemplated tender offer. AMH LLC is a single-member limited liability company, with Aurelius Global Media Group PLC as its sole member.
On August 16, 2021, Aurelius engaged Calderwood & Harkness LLP as its U.S. M&A counsel. James Prentice, the responsible partner at Calderwood & Harkness, located at 787 Seventh Avenue, 42nd Floor, New York, New York 10019 (C&H matter number 1011-00002), was designated as lead counsel. Calderwood & Harkness advised Aurelius on all aspects of U.S. securities law compliance, including the preparation of the Schedule TO, this Offer to Purchase, the Letter of Transmittal, and related SEC filings. Aurelius also engaged Dunmore Asset Advisors Chambers LLP (Alistair Drummond, Lead Partner), located at 12 King's Bench Walk, London EC4Y 7EL, as English law counsel for purposes of advising on London Stock Exchange disclosure obligations, the UK Takeover Code (to the extent applicable given the structure of the transaction), and other matters of English law.
On August 20, 2021, AMH LLC, as borrower, and Aurelius Global Media Group PLC, as guarantor, executed a commitment letter (Reference: CL-2021-MTC-00487) with Brindoval National Bank, N.A. for a $30,000,000 senior secured term loan facility to finance the Offer. Thomas Brierly, Director, Media & Telecom Lending at Brindoval National Bank, N.A., served as the lead arranger. The commitment letter provides for customary conditions to funding, including accuracy of representations and warranties, no material adverse effect, and consummation of the Offer in accordance with its terms. See Section 7 — "Source and Amount of Funds."
On August 25, 2021, AMH LLC completed its final open-market purchase of Pinnacle Shares, bringing its total holdings to 980,000 Shares (4.9% of the outstanding Shares). On August 26, 2021, AMH LLC filed a Schedule 13D with the SEC disclosing its beneficial ownership of 980,000 Shares of Pinnacle common stock.
On August 30, 2021, in connection with the contemplated tender offer, AMH LLC and Aurelius filed pre-merger notification forms under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), with the Federal Trade Commission (the "FTC") and the Antitrust Division of the U.S. Department of Justice (the "DOJ"). The HSR Transaction Number assigned to the filing is 20211892. The filing fee of $45,000 was paid by AMH LLC, based on the applicable filing fee thresholds in effect for 2021 (the aggregate transaction value falling within the $92 million threshold band). AMH LLC also requested early termination of the statutory waiting period.
On September 1, 2021, the board of directors of Aurelius Global Media Group PLC, meeting under the chairmanship of Dame Catherine Forsyth (independent non-executive director and Board Chair), adopted a resolution authorizing the commencement of the tender offer for up to 6,980,050 Shares of Pinnacle common stock at a price of $4.01 per Share. Sir Marcus Prumvane (Chief Executive Officer) and Elena Markov (Chief Financial Officer) approved the final offer terms, including the Offer Price, the number of Shares sought, the conditions to the Offer, and the engagement of Continental Fiduciary Services, Inc. as Depositary and Ridgeway Proxy Advisors LLC as Information Agent.
On September 8, 2021, the Offeror filed the Schedule TO (SEC File No. 005-92847) with the SEC and commenced the Offer by dissemination of this Offer to Purchase and the related Letter of Transmittal to holders of Pinnacle common stock.
SECTION 7 — SOURCE AND AMOUNT OF FUNDS
7.1 Financing Overview
The total funds required to consummate the Offer, assuming the maximum number of Shares sought is tendered and accepted, is approximately $28,000,000, representing the purchase of up to 6,980,050 Shares at the Offer Price of $4.01 per Share (equal to $27,989,000.50 in aggregate Share purchase price), plus fees, expenses, and related transaction costs estimated at approximately $1,500,000 to $2,000,000. See Section 18 — "Fees and Expenses." All funds required for the Offer will be provided under a committed senior secured term loan facility from Brindoval National Bank, N.A.
The Offeror believes that the Brindoval Facility (as defined below) provides sufficient committed financing to fund the Offer in full, including the payment of all related fees and expenses. The Offer is conditioned on the availability of financing under the Brindoval Facility. See Section 14 — "Conditions of the Offer."
7.2 The Brindoval Facility
The following is a summary of the material terms of the committed term loan facility (the "Brindoval Facility") pursuant to which the Offeror will finance the Offer:
Lender: Brindoval National Bank, N.A., a national banking association organized under the laws of the United States, with its principal office at 383 Madison Avenue, New York, New York 10179.
Borrower: Aurelius Media Holdings LLC.
Guarantor: Aurelius Global Media Group PLC.
Commitment Amount: $30,000,000.
Type: Senior secured term loan.
Interest Rate: LIBOR plus 3.25% per annum, with a LIBOR floor of 0.50%. Interest payments are due quarterly in arrears. The applicable LIBOR rate will be the three-month LIBOR rate determined two (2) business days prior to the commencement of each interest period.
Maturity: Three (3) years from the date of initial funding (the "Funding Date").
Commitment Expiration: The commitment under the Brindoval Facility will expire on December 31, 2021, subject to one ninety (90) day extension at the borrower's option, exercisable by written notice to Brindoval National Bank, N.A. no later than ten (10) business days prior