Mumbai: JumpTV and NeuLion have signed a binding letter of intent to merge, creating a leading enterprise Internet Protocol Television (IPTV) provider of online sports, international and religious programming.
Under the terms of the Transaction, JumpTV will issue 49,521,958 common shares, 1,840,097 contingent shares, which represents approximately the entire issued and outstanding shares of JumpTV, and five million warrants exercisable for two years at $0.05 above the five-day weighted average closing price, prior to the execution of the definitive agreement.
JumpTV also intends to grant 2.7 million employee stock options, subject to securities law and exchange rules compliance, exercisable at the five-day weighted average closing price prior to closing, which is expected to be on or before 1 October.
This financial information will be audited in connection with the Transaction and included in the Information Circular for the JumpTV shareholders. JumpTV has engaged Oppenheimer as its financial advisor in connection with the Transaction and JumpTV’s Board of Directors has retained Canaccord Adams to provide a fairness opinion which will be included within the information circular in advance of the shareholder vote.
The Transaction is expected to be completed in the fall of 2008, subject to receipt of shareholder and customary regulatory approvals, as well as satisfaction of other customary closing conditions. The merged company will continue to be listed on the Toronto Stock Exchange.
In accordance with the rules of the AIM market of the London Stock Exchange, the company’s shares have been suspended from trading on AIM until the completion of the transaction. At that time, the company will either reapply for admission for trading or will seek its shareholders’ approval for cancellation of the listing.
Terms of the Agreement
The transaction is conditional on the companies entering into a definitive agreement on or before 25 June, 2008 and shareholder approval at a meeting anticipated to be held on or about October 1, 2008.
In connection with the merger, JumpTV has decided to retain certain assets of its content delivery network and international channels, which it will leverage within the combined company structure and multi-platform IPTV offering. JumpTV previously disclosed that it intended to divest its CDN and international channels.
