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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 14, 1997
HEFTEL BROADCASTING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-24516 99-0113417
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) No.)
100 Crescent Court, Suite 1777
Dallas, Texas 75201
(Address of principal executive offices, including zip code)
(Registrant's telephone number, including area code): (214) 855-8882
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Item 2. Acquisition or Disposition of Assets
On February 14, 1997, Heftel Broadcasting Corporation (the "Company")
completed its acquisition of Tichenor Media System, Inc. ("Tichenor"), a
national radio broadcasting company engaged in the business of acquiring,
developing and programming Spanish language radio stations. The acquisition
was effected through the merger of a wholly owned subsidiary of the Company
with and into Tichenor (the "Merger"). Under the terms of that certain Amended
and Restated Agreement and Plan of Merger by and among Clear Channel
Communications, Inc. ("Clear Channel") and Tichenor dated October 10, 1996 (the
"Merger Agreement") (which agreement was assigned to the Company by Clear
Channel), Tichenor shareholders received (a) 7.8261 shares of Heftel Class A
Common Stock, par value $.001 per share ("Heftel Common Stock"), in exchange
for each share of Tichenor Common Stock and (b) 4.3478 shares of Heftel Common
Stock in exchange for each share of Tichenor Junior Preferred Stock.
Fractional shares were not issued; instead former Tichenor shareholders will be
entitled to receive in cash an amount equal to the product of $44.00, the
closing price of a share of Heftel Common Stock on February 13, 1997,
multiplied by the fractional share percentage. In addition, the holders of
Tichenor 14% Senior Redeemable Cumulative Preferred Stock ("Tichenor Senior
Preferred") received $1,000 per share plus accrued and unpaid dividends through
December 31, 1995 for each share of Tichenor Senior Preferred.
The transaction value of the Merger was approximately $326.9 million
which is the sum of (a) the fair value of the Tichenor stock ($251.1 million),
(b) the outstanding Tichenor Senior Preferred ($3.3 million), and (c)
Tichenor's long-term debt ($72.5 million). The fair value of the Tichenor stock
is the sum of (a) the issuance of 5,689,878 shares of Heftel Common Stock with
an aggregate value of $250.4 million based on a closing price of $44.00 per
share on February 13, 1997, and (b) the direct costs related to the Merger. The
Merger will be accounted for using the purchase method of accounting. The
direct costs related to the Merger were funded from the working capital of the
Company. The Tichenor Senior Preferred Stock and long-term debt were retired at
the date of the Merger using a portion of the proceeds from the Company's
recently completed secondary public stock offering plus borrowings under a new
credit agreement.
At the effective time of the Merger, the existing board of directors of
the Company resigned and five designees of Tichenor were appointed to serve as
the directors of the Company. The Tichenor designees are McHenry T. Tichenor,
Jr., McHenry T. Tichenor, Sr., Robert W. Hughes, James M. Raines and Ernesto
Cruz. In addition, McHenry T. Tichenor, Jr., the former president and a
principal shareholder of Tichenor became the Chairman, President and Chief
Executive Officer of the Company pursuant to a five year employment agreement.
Further, immediately prior to the effective time of the Merger, the
Company filed a Second Amended and Restated Certificate of Incorporation
("Second Amended Certificate"), which increased the total number of
authorized shares of the Company to 105,000,000 shares consisting of three
classes of capital stock as follows: (i) 50,000,000 shares of Class A Common
Stock, par value $.001 per share; (ii) 50,000,000 shares of Class B Common
Stock, par value $.001 per share; and (iii) 5,000,000 shares of Preferred
Stock, par value $.001
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per share. The rights of the Class A and Class B Common Stock are identical
except that the Class B Common Stock shall have no voting rights, except in
certain matters. Under the terms of the Merger Agreement, all of the
outstanding shares of Heftel Common Stock owned by Clear Channel were converted
to Class B Common Stock at the effective time of the Merger.
Item 5. Other Events
On February 14, 1997, the Company and its subsidiaries entered into a
new credit agreement ("Credit Agreement") with The Chase Manhattan Bank, as
Administrative agent, and certain other lenders (collectively the "Lenders").
The Credit Agreement provides a total credit facility of $300 million. On
February 14, 1997, the Company used advances of $46 million under the Credit
Agreement and a portion of the proceeds from the Company's recently completed
secondary public stock offering to retire the outstanding debt of Tichenor
assumed on the date of the Merger.
See Exhibit 10.5 hereto for further information.
Item 7. Financial Statements and Exhibits
(b) The following exhibits are included herein:
2.1 Amended and Restated Agreement and Plan of Merger, dated October
10, 1996, between Clear Channel Communications, Inc. and Tichenor
Media System, Inc. without Exhibits (Schedules omitted)
(incorporated by reference to Exhibit 2.5.7 to the Company's
Annual Report on Form 10-K/A for the year ended September 30,
1996).
2.2 Assignment Agreement, dated October 10, 1996 by Registrant and
Heftel Merger Sub, Inc. (incorporated by reference to Exhibit
2.5.8 to the Company's Annual Report on Form 10-K/A for the year
ended September 30, 1996).
3.1 Second Amended and Restated Certificate of Incorporation dated
February 14, 1997.
10.1 Registration Rights Agreement, dated February 14, 1997, by and
among the Registrant, McHenry T. Tichenor, Sr., McHenry T.
Tichenor, Jr., Warren W. Tichenor, William E. Tichenor, Jean T.
Russell, McHenry T. Tichenor, Jr., as Custodian for David T.
Tichenor, Alta Subordinated Debt Partners III, L.P., Prime II
Management, LP, PrimeComm, LP, Ricardo A. del Castillo, Jeffrey
T. Hinson and David L. Lykes.
10.2 Employment Agreement, dated February 14, 1997, by and between
the Registrant and McHenry T. Tichenor, Jr.
10.3 Stockholders Agreement, dated February 14, 1997, by and among
the Registrant and each of the stockholders listed on the
signature pages thereto (incorporated by reference to Exhibit
10.4 to Schedule 13(d) of McHenry T. Tichenor, Jr. filed on
February 14, 1997).
10.4 Registration Rights Agreement, dated February 14, 1997, by and
among the Registrant and Clear Channel Communications, Inc.
10.5 Credit Agreement between Heftel Broadcasting Corporation and
Subsidiaries and The Chase Manhattan Bank, as Administrative
Agent, and certain other lenders dated February 14, 1997 without
Exhibits (Schedules omitted).
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Registrant agrees to furnish supplementally a copy of any omitted
schedules or Exhibits to the Commission upon request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated March 3, 1997 HEFTEL BROADCASTING CORPORATION
By: /s/ Jeffrey T. Hinson
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Jeffrey T. Hinson
Senior Vice President and
Chief Financial Officer
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
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2.1 Amended and Restated Agreement and Plan of Merger, dated October
10, 1996, between Clear Channel Communications, Inc. and Tichenor
Media System, Inc. without Exhibits (Schedules omitted)
(incorporated by reference to Exhibit 2.5.7 to the Company's
Annual Report on Form 10-K/A for the year ended September 30,
1996).
2.2 Assignment Agreement, dated October 10, 1996 by Registrant and
Heftel Merger Sub, Inc. (incorporated by reference to Exhibit
2.5.8 to the Company's Annual Report on Form 10-K/A for the year
ended September 30, 1996).
3.1 Second Amended and Restated Certificate of Incorporation dated
February 14, 1997.
10.1 Registration Rights Agreement, dated February 14, 1997, by and
among the Registrant, McHenry T. Tichenor, Sr., McHenry T.
Tichenor, Jr., Warren W. Tichenor, William E. Tichenor, Jean T.
Russell, McHenry T. Tichenor, Jr., as Custodian for David T.
Tichenor, Alta Subordinated Debt Partners III, L.P., Prime II
Management, LP, PrimeComm, LP, Ricardo A. del Castillo, Jeffrey
T. Hinson and David L. Lykes.
10.2 Employment Agreement, dated February 14, 1997, by and between
the Registrant and McHenry T. Tichenor, Jr.
10.3 Stockholders Agreement, dated February 14, 1997, by and among
the Registrant and each of the stockholders listed on the
signature pages thereto (incorporated by reference to Exhibit
10.4 to Schedule 13(d) of McHenry T. Tichenor, Jr. filed on
February 14, 1997).
10.4 Registration Rights Agreement, dated February 14, 1997, by and
among the Registrant and Clear Channel Communications, Inc.
10.5 Credit Agreement between Heftel Broadcasting Corporation and
Subsidiaries and The Chase Manhattan Bank, as Administrative
Agent, and certain other lenders dated February 14, 1997 without
Exhibits (Schedules omitted).