| Item 1.01 | Entry into a Material Definitive Agreement. |
On April 3, 2023, Sinclair Broadcast Group, Inc., a Maryland corporation (“Sinclair Broadcast”), entered into an Agreement of Share Exchange and Plan of Reorganization (the “Reorganization Agreement”) with Sinclair, Inc., a Maryland corporation (“New Sinclair”), and Sinclair Holdings, LLC, a Maryland limited liability company. Under the Reorganization Agreement, Sinclair Broadcast would implement a reorganization in which New Sinclair would become the publicly-traded parent company of Sinclair Broadcast and its subsidiaries. Subject to the conditions set forth in the Reorganization Agreement, the reorganization will be effected through a share exchange (the “Reorganization”) under Maryland law. In the Reorganization, each outstanding share of Sinclair Broadcast’s Class A common stock and Class B common stock would be exchanged automatically on a one-for-one basis for a share of Class A common stock and Class B common stock, respectively, of New Sinclair. The rights and benefits of the holders of shares of New Sinclair’s common stock, including voting rights, would be the same as the rights and benefits of the holders of shares of Sinclair Broadcast’s common stock in all material respects. In addition, Sinclair Broadcast will become a wholly-owned subsidiary of New Sinclair.
The Reorganization is not expected to result in a change in the directors, executive officers, management or business of the publicly-traded company, or to impact the timing of the declaration and payment of regular quarterly dividends. The Reorganization is not expected to result in gain or loss to Sinclair Broadcast’s stockholders for U.S. federal income tax purposes. We expect the New Sinclair Class A Common Stock to be listed on the NASDAQ Stock Market’s Global Select Market under the ticker symbol “SBGI,” the same market and ticker symbol currently used by the Sinclair Broadcast Class A Common Stock.
Sinclair Broadcast will complete the Reorganization only if each of the conditions set forth in the Reorganization Agreement is satisfied, including receipt of the required approval of Sinclair Broadcast’s stockholders. Under Maryland law, the Reorganization requires the approval of the stockholders of Sinclair Broadcast by the affirmative vote of two-thirds of all the votes entitled to be cast on the matter.
The Reorganization Agreement or the Reorganization may be deferred or terminated by Sinclair Broadcast’s Board of Directors at any time prior to completion (even after approval by Sinclair Broadcast’s stockholders).
The foregoing description of the Reorganization Agreement is not complete and is qualified in its entirety by reference to the text of the Reorganization Agreement, which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure. |
On April 3, 2023, Sinclair Broadcast issued a press release pertaining to the Reorganization and posted to its website a Holding Company Reorganization Q&A, copies of which are furnished as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K.
The information contained in this Item 7.01 and Exhibits 99.1 and 99.2 shall not be incorporated by reference into any filing of the registrant, whether made before, on or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference hereto. The information contained in this Item 7.01 and Exhibits 99.1 and 99.2 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.
For purposes of updating and restating its risk factor disclosure, including as discussed under the heading “Item 1A. Risk Factors” in its Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the Securities and Exchange Commission (the “SEC”) on March 1, 2023, Sinclair Broadcast hereby incorporates by reference into this Current Report on Form 8-K the risk factor disclosure filed as Exhibit 99.3 hereto.
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