Metromedia International Group and Alliance Entertainment sign merger agreement

Business Wire, Dec 21, 1995

NEW YORK--(BUSINESS WIRE)--Dec. 21, 1995--Metromedia International Group Inc. (MIGI) (AMEX:MMG) and Alliance Entertainment Corp. (NYSE:CDS) today announced that they have signed a merger agreement to merge Alliance with a newly-formed, wholly owned subsidiary of MIGI.

The terms of the merger agreement (which vary from those in the letter of intent entered into on Nov. 30, 1995 between MIGI and Alliance) provide that upon consummation of the merger Alliance shareholders will exchange each of their shares of Alliance common stock for (i) .7 shares of MIGI common stock, and (ii) a ten-year warrant to purchase .285 shares of MIGI common stock at an exercise price of $20.00 per share.

Alliance and MIGI announced that they have restructured the terms of the transaction in order to help provide for a more orderly trading market in MIGI stock, but that they believe the restructured deal is substantially equivalent on an economic basis to the transaction outlined in the letter of intent.

Joseph Bianco, chairman and chief executive of Alliance, will become the chief executive officer of all of Metromedia's entertainment entities other than Metromedia International Telecommunications Inc.

Consummation of the merger is subject to, among other customary closing conditions, the approval of the board of directors of Alliance and MIGI no later than Jan. 31, 1996, the approval of the transaction by the shareholders of Alliance and MIGI and the receipt of regulatory approvals, including the lapse or early termination of the applicable waiting period under Hart-Scott-Rodino.

The merger agreement provides that Alliance has the right to terminate the merger agreement in the event that the average closing price for MIGI common stock is below $14.50 per share for the 20 trading days ending six days prior to the day of the Alliance and MIGI's stockholder meetings called to approve the merger. (The average closing price of MIGI common stock on the American Stock Exchange for the 20 trading days ended Dec. 19 was $15.20 per share.)

The merger agreement further provides that Metromedia Co., an affiliate of MIGI, has agreed to provide to MIGI a guaranty of any financing necessary to repurchase Alliance 11-1/4% senior subordinated notes due 2005 which are tendered pursuant to the change of control provisions governing such notes. The merger agreement can be terminated by either Alliance or MIGI in the event that the conditions to the consummation of the merger are not met by Sept. 30, 1996.

Alliance is the largest full service distributor of pre-recorded music and music related products in the United States and is also actively engaged in the acquisition and exploitation of proprietary rights with respect to recorded music, video and video CDS.

Metromedia International Group is an international communications, media and entertainment company. Its core businesses are Orion Pictures Corp., a film production and distribution company with a film library of more than 1,000 titles and Metromedia International Telecommunications Inc., a company which operates communications and media businesses in Eastern Europe and former Soviet Republics.

Metromedia International Group also owns Snapper Inc. which manufactures and sells lawn and garden equipment. The company also owns approximately 39% of the outstanding shares of Roadmaster Industries Inc. (NYSE:RDM), a leading sporting goods manufacturer.

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