United States securities and exchange commission logo
July 15, 2022
Jeffrey Marell
Partner
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
Re: HEMISPHERE MEDIA
GROUP, INC.
Schedule 13E3 filed
by Hemisphere Media Group, Inc. et. al.
Filed June 27, 2022
File No. 005-87408
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Preliminary Proxy
Statement
Filed June 27, 2022
File No. 001-35886
Dear Mr. Marell:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments by providing the requested
information or advise us as
soon as possible when you will respond. If you do not believe our
comments apply to your facts
and circumstances, please tell us why in your response.
After reviewing your
response to these comments, we may have additional comments.
Schedule 13E-3
Exhibits
1. Please refile exhibits
(c)(iii), (c)(iv) and (c)(v) without the "confidential" headers.
General
2. Please provide us your
analysis as to why Searchlight is not a filing person. We note that
Searchlight, not Gato,
initiated and conducted the negotiations for the current transaction
and that you refer to
certain Hemisphere board members as "Searchlight s representatives
on the Hemisphere
Board."
Jeffrey Marell
FirstName LastNameJeffrey Marell
Paul, Weiss, Rifkind, Wharton & Garrison LLP
Comapany
July NamePaul, Weiss, Rifkind, Wharton & Garrison LLP
15, 2022
July 15,
Page 2 2022 Page 2
FirstName LastName
Preliminary Proxy Statement
Summary Term Sheet, page 1
3. Please shorten the summary term sheet and Q&A sections significantly
while keeping
only a description of the most material terms of the proposed
transaction. Refer to Item
1001 of Regulation M-A.
4. We note your statements that "Under a possible interpretation of the
SEC rules governing
going-private transactions, each of the Parent Entities may be
deemed to be affiliates of
Hemisphere" on page 3 and throughout the proxy statement. Given your
determination to
include those persons as filing persons to the Schedule 13E-3, it is
inappropriate to make
such disclaimers. Please revise.
Background of the Mergers, page 22
5. Refer to the entry for January 6, 2022, on page 23. Please tell us why
neither Searchlight
nor Gato filed a Schedule 13D or an amendment thereto in connection
with its decision to
submit an indication of interest to acquire all of the company's
outstanding shares, its
subsequent submission of the indication of interest on January 8, 2022
and other events
during the negotiation of the current transaction.
6. Please update your disclosure relating to the proposals received after
the execution of the
merger agreement.
Purpose and Reasons of Hemisphere for the Mergers, page 33
7. We note your disclosure that this section includes "some of the
significant factors"
supporting the Special Committee's fairness determination. Please
revise to include all
material factors.
8. We note the disclosure on page 23 relating to the authority granted to
the Special
Committee. It does not appear that the Board delegated authority to
the Special
Committee to evaluate the fairness of the transactions on the
company's behalf. Thus,
please revise this section to explicitly state whether Hemisphere
reasonably believes that
the transactions are fair or unfair to unaffiliated security holders.
See Item 1014(a) of
Regulation M-A.
9. Provide the disclosure to address each factor included instruction 2
to Item 1014 of
Regulation M-A. Apply this comment also to the Parent Entities
disclosure.
10. Please revise your disclosure to discuss how the fact that
shareholders of Class B common
stock are receiving $7 per share affects your fairness determination.
Apply this comment
also to the Parent Entities disclosure.
Jeffrey Marell
FirstName LastNameJeffrey Marell
Paul, Weiss, Rifkind, Wharton & Garrison LLP
Comapany
July NamePaul, Weiss, Rifkind, Wharton & Garrison LLP
15, 2022
July 15,
Page 3 2022 Page 3
FirstName LastName
11. We note that the Special Committee considered the Moelis and PJT
analyses and
opinions. Note that if any filing person has based its fairness
determination on the analysis
of factors undertaken by others, such person must expressly adopt this
analysis and
discussion as their own in order to satisfy the disclosure obligation.
See Question 20 of
Exchange Act Release No. 34-17719 (April 13, 1981). Please revise to
state, if true, that
the Special Committee adopted Moelis's and PJT's analyses and
conclusions as its own.
Alternatively, revise your disclosure to include disclosure responsive
to Item 1014 of
Regulation M-A and to address the factors listed in instruction 2 to
Item 1014.
12. Please address how any filing person relying on the Moelis opinion was
able to reach the
fairness determination as to unaffiliated security holders given that
the fairness opinion
addressed fairness with respect to holders of your shares other than
the Excluded Shares,
rather than all security holders unaffiliated with the company.
Opinion of PJT Partners LP, page 36
13. Please revise the subsection captioned "Selected Precedent
Transactions Analysis" to
explain why PJT determined to lower the high end of the range of
TEV/LTM EBITDA
(post-SBC) Networks Selected Transactions from 16.2x to 8x. Also,
revise the section
disclosing the company's fairness determination to describe how the
Special Committee
considered such a significant reduction in this multiple.
Opinion of Moelis & Company LLC, page 44
14. We note that Moelis made an oral presentation on March 7, 2022. Please
revise this
section to provide the disclosure required by Item 1015(b)(6) of
Regulation M-A with
respect to that presentation and to the April 24, 2022 presentation.
Certain Unaudited Prospective Financial Information, page 59
15. Please revise to include the full projections instead of a summary.
Where You Can Find Additional Information, page 143
16. Note that neither Schedule 13E-3 nor Schedule 14A specifically permit
general forward
incorporation of documents to be filed in the future. Rather, you
must specifically amend
your document to specifically list any such filings. Please revise.
Jeffrey Marell
FirstName LastNameJeffrey Marell
Paul, Weiss, Rifkind, Wharton & Garrison LLP
Comapany
July NamePaul, Weiss, Rifkind, Wharton & Garrison LLP
15, 2022
July 15,
Page 4 2022 Page 4
FirstName LastName
Form of Proxy Card, page E-6
17. Please revise the form of proxy to clearly identify each as being
preliminary. See Rule
14a-6(e)(1) of Regulation 14A. In this respect, please confirm
supplementally that you
will not use any proxies you received.
We remind you that the filing persons are responsible for the accuracy
and adequacy of
their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
Please direct any questions to Daniel Duchovny at (202) 551-3619.
Sincerely,
Division of
Corporation Finance
Office of Mergers
& Acquisitions