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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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): JANUARY 26, 1999
THE MARQUEE GROUP, INC.
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(Exact Name of Registrant as specified in its charter)
DELAWARE 0-21711 13-3878295
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
888 SEVENTH AVENUE, 37TH FLOOR, NEW YORK, NY 10019
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 977-0300
N/A
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
The Marquee Group, Inc. ("Marquee") entered into an Agreement and
Plan of Merger (the "Merger Agreement"), dated as of July 23, 1998, with SFX
Entertainment, Inc. ("SFX") and SFX Acquisition Corp., a wholly-owned
subsidiary of Parent ("Sub"), pursuant to which Sub will be merged with and
into Marquee (the "Merger") and Marquee shall continue as the surviving
corporation of the Merger. Marquee entered into Amendment No. 4 to the Merger
Agreement ("Amendment No. 4"), dated as of January 24, 1999, pursuant to which,
among other things, the exchange ratio in the Merger Agreement was adjusted to
reflect a new memorandum of understanding entered into in connection with the
proposed settlement of the pending shareholder litigation. As previously
provided in the Merger Agreement, if the average of the last reported sale
price of the SFX Class A common stock for fifteen consecutive trading days
ending five days before the Merger (the "SFX Stock Price") is less than $42.75,
then Marquee shareholders will receive 0.1111 shares of SFX Class A common
stock for each share of Marquee common stock in the Merger. Pursuant to
Amendment No. 4, however, if the SFX Stock Price is greater than $42.75 but
less than or equal to $60.00, the Marquee shareholders will receive for each
share of Marquee common stock the number of shares of SFX Class A common stock
equal to the quotient obtained by dividing $4.75 by the SFX Stock Price. If the
SFX Stock Price is greater than $60.00 but less than or equal to $66.00, the
Marquee shareholders will receive for each share of Marquee common stock the
number of shares of SFX Class A common stock equal to the difference between
0.1000 less the quotient obtained by dividing 1.25 by the SFX Stock Price, and
if the SFX Stock Price is greater than $66.00, the Marquee shareholders will
receive for each share of Marquee common stock the number of shares SFX Class A
common stock equal to the quotient obtained by dividing $5.35 by the SFX Stock
Price. The Board of Directors of Marquee received an updated fairness opinion
to the effect that as of January 24, 1999, the merger consideration (giving
effect to Amendment No. 4) is fair, from a financial point of view, to the
Marquee shareholders (other than Messrs. Sillerman and Tytel).
The consummation of the Merger remains subject to the satisfaction
of a number of conditions, including the approval of the shareholders of
Marquee. It is anticipated that the Marquee shareholders' meeting will be held
in March of 1999.
The foregoing description of Amendment No. 4 does not purport to be
complete and is qualified in its entirety by the copy of Amendment No. 4
attached hereto as an exhibit.
Additionally, Marquee and SFX issued a joint press release on
January 25, 1999 announcing Amendment No. 4.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(C) Exhibits.
2.1 Amendment No. 4, dated as of January 24, 1999, to the
Agreement and Plan of Merger among SFX Entertainment, Inc.,
SFX Acquisition Corp. and The Marquee Group, Inc.
99.1 Joint Press release dated January 25, 1999.
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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.
THE MARQUEE GROUP, INC.
By: /s/ Jan E. Chason
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Name: Jan E. Chason
Title: Chief Financial Officer and Treasurer
Date: January 26, 1999
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EXHIBIT INDEX
Exhibit
No. Description
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2.1 Amendment No. 4, dated as of January 24, 1999, to the Agreement and
Plan of Merger among SFX Entertainment, Inc., SFX Acquisition Corp.
and The Marquee Group, Inc.
99.1 Joint Press Release dated January 25, 1999.
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Exhibit 2.1
AMENDMENT NO. 4
TO
AGREEMENT AND PLAN OF MERGER
AMONG
SFX ENTERTAINMENT, INC.,
SFX ACQUISITION CORP.
AND
THE MARQUEE GROUP, INC.
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AMENDMENT NO. 4 TO AGREEMENT AND PLAN OF MERGER dated as of
January 24, 1999, among SFX Entertainment, Inc., a Delaware corporation
("SFX"), SFX Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of SFX ("Acquisition Sub"), and The Marquee Group, Inc., a Delaware
corporation ("Marquee").
WHEREAS, SFX, Acquisition Sub and Marquee have entered into
an Agreement and Plan of Merger, dated as of July 23, 1998 (as amended, the
"Merger Agreement"), pursuant to which, among other things, the parties agreed
to the merger of Acquisition Sub with and into Marquee, upon the terms and
subject to the conditions set forth in the Merger Agreement;
WHEREAS, SFX, Acquisition Sub and Marquee have entered into
Amendments Nos. 1, 2 and 3 to the Merger Agreement;
WHEREAS, the parties to the Merger Agreement desire to
further amend the Merger Agreement as set forth herein;
WHEREAS, the Board of Directors of Marquee (including the
Marquee Independent Committee) (a) has determined that the Merger (giving
effect to this Amendment No. 4) is advisable and in the best interests of
Marquee and its stockholders, (b) has approved this Amendment and the
Transactions and (c) has recommended the adoption of the Merger Agreement and
the Merger by, and directed that the Merger Agreement and the Merger be
submitted to a vote of, the stockholders of Marquee;
WHEREAS, the Board of Directors of SFX (including the SFX
Independent Committee) has determined that the Merger (giving effect to this
Amendment No. 4) is in the best interests of SFX and its stockholders and has
approved this Amendment and the Transactions; and
WHEREAS, capitalized terms used but not defined herein have
the meanings ascribed to them in the Merger Agreement;
NOW, THEREFORE, the parties to the Merger Agreement further
agree as follows:
1. Section 2.01(b) is hereby deleted in its entirety and
replaced by the following:
(b) 'Exchange Ratio' shall have the following meaning,
subject to adjustment pursuant to Section 2.01(c):
(i) if the SFX Class A Common Stock Price (as
defined hereinafter) is less than or equal to $42.75, then
'Exchange Ratio' shall mean 0.1111 of a share of SFX Class A
Common Stock;
(ii) if the SFX Class A Common Stock Price is
greater than $42.75 but less than or equal to $60.00, then
'Exchange Ratio' shall
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mean a number of shares of SFX Class A Common Stock equal to
the quotient obtained by dividing $4.75 by the SFX Class A
Common Stock Price;
(iii) if the SFX Class A Common Stock Price is
greater than $60.00 but less than or equal to $66.00, then
'Exchange Ratio' shall mean a number of shares of SFX Class A
Common Stock equal to the difference between (A) 0.1000 less
(B) the quotient obtained by dividing 1.25 by the SFX Class A
Common Stock Price; and
(iv) if the SFX Class A Common Stock Price is
greater than $66.00, then 'Exchange Ratio' shall mean a
number of shares of SFX Class A Common Stock equal to the
quotient obtained by dividing $5.35 by the SFX Class A Common
Stock Price.
As used in this Agreement, the term 'SFX Class A Common Stock Price'
means the average of the last reported sale price of the SFX Class A
Common Stock for the fifteen consecutive trading days ending on the
fifth trading day prior to the Effective Time on the primary exchange
on which the SFX Class A Common Stock is traded, including the Nasdaq
National Market.
2. Marquee hereby represents to SFX that it has received the
written opinion of the Marquee Banker on the date of this Amendment to the
effect that, as of the date hereof, the Merger Consideration (giving effect
hereto) is fair, from a financial point of view, to the holders of Marquee
Common Stock. This opinion supersedes the opinions delivered pursuant to
Section 3.14 of the Merger Agreement and Section 2 of Amendment No. 3 to the
Merger Agreement.
3. SFX hereby represents to Marquee that it has received the
written opinion of the SFX Banker to the effect that the Merger Consideration
(giving effect to this Amendment No. 4) to be offered by SFX in the Merger is
fair, from a financial point of view, to SFX as of the date hereof. This
opinion supersedes the opinions delivered pursuant to Section 4.11 of the
Merger Agreement and Section 3 of Amendment No. 3 to the Merger Agreement.
4. The parties hereby amend the Merger Agreement to add the
following Section 6.16:
SECTION 6.16. FINANCING MATTERS. SFX hereby agrees to provide
financing to Marquee, on mutually acceptable terms and in an amount
not to exceed US$5.0 million in the aggregate, solely for purposes of
permitting Marquee to make the acquisition described on Schedule 6.16
hereof. If this Agreement is terminated for any reason, the amount of
such financing, together with interest thereon at the rate stated
therein, shall be repaid by Marquee to SFX within one year of such
termination.
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5. The parties hereby amend the Merger Agreement to include
Schedule 6.16 hereto as Schedule 6.16 thereof.
6. Marquee has all necessary corporate power and authority to
execute and deliver this Amendment and, with respect to the Merger, upon the
approval and adoption of the Merger Agreement by Marquee's stockholders in
accordance with the Merger Agreement and Delaware Law, to perform its
obligations hereunder and to consummate the Transactions. The execution and
delivery of this Amendment by Marquee and the consummation by Marquee of the
Transactions have been duly and validly authorized by all necessary corporate
action, and no other corporate proceedings on the part of Marquee are necessary
to authorize this Amendment or to consummate the Transactions (other than, with
respect to the Merger, the approval and adoption of the Merger Agreement by the
stockholders of Marquee as set forth in Section 3.15 of the Merger Agreement
and the filing of an appropriate Certificate of Merger with the Secretary as
required by Delaware Law). This Amendment has been duly and validly executed
and delivered by Marquee and, assuming the due authorization, execution and
delivery of this Amendment by SFX and Acquisition Sub, constitutes a legal,
valid and binding obligation of Marquee, enforceable against Marquee in
accordance with its terms.
7. Each of SFX and Acquisition Sub has all necessary
corporate power and authority to execute and deliver this Amendment, to perform
its obligations hereunder and to consummate the Transactions. The execution and
delivery of this Amendment by SFX and Acquisition Sub and the consummation by
SFX and Acquisition Sub of the Transactions have been duly and validly
authorized by all necessary corporate action, and no other corporate
proceedings on the part of SFX or Acquisition Sub are necessary to authorize
this Amendment or to consummate the Transactions (other than, with respect to
the issuance of SFX Class A Common Stock pursuant to the Merger, the applicable
rules and regulations of the Nasdaq Stock Market, and with respect to the
Merger, the filing of an appropriate Certificate of Merger with the Secretary
as required by Delaware Law). This Amendment has been duly and validly executed
and delivered by SFX and Acquisition Sub and, assuming the due authorization,
execution and delivery of this Amendment by Marquee, constitutes a legal, valid
and binding obligation of each of SFX and Acquisition Sub enforceable against
each of SFX and Acquisition Sub in accordance with its terms.
8. Except to the extent expressly set forth in this Amendment
No. 4 to Agreement and Plan of Merger, no terms and conditions of the Merger
Agreement are amended or modified hereby, and all such terms and conditions
shall remain in full force and effect.
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IN WITNESS WHEREOF, SFX, Acquisition Sub and Marquee have
caused this Amendment No. 4 to Agreement and Plan of Merger to be signed by
their respective officers thereunto duly authorized, all as of the date first
written above.
SFX ENTERTAINMENT, INC.
By: /s/ Howard J. Tytel
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Howard J. Tytel
Executive Vice President and Secretary
SFX ACQUISITION CORP.
By: /s/ Howard J. Tytel
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Howard J. Tytel
Executive Vice President and Secretary
THE MARQUEE GROUP, INC.
By: /s/ Robert M. Gutkowski
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Robert M. Gutkowski
President and Chief Executive Officer
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EXHIBIT 99.1
For further information:
Timothy J. Klahs
Director, Investor Relations
SFX Entertainment, Inc.
FOR IMMEDIATE RELEASE (212) 407-9126
SFX ENTERTAINMENT, INC. AND THE MARQUEE GROUP, INC.
MAKE MINOR ADJUSTMENT TO TERMS OF MERGER AGREEMENT
NEW YORK, January 25, 1999 -- SFX Entertainment, Inc. (NASDAQ: SFXE) and The
Marquee Group, Inc. (AMEX: MRT) today jointly announced that they have amended
the merger agreement regarding the proposed acquisition of Marquee by SFX
Entertainment.
As previously announced, SFX and Marquee entered into a merger agreement on
July 23, 1998 which was subsequently amended and is now presently pending. Also
as previously announced, both companies and their directors had been sued by a
representative of certain Marquee shareholders alleging that the terms of the
merger were unfair to Marquee public shareholders. While neither company
believes this to be the case, the litigation was resolved, subject to court
approval, pursuant to a memorandum of understanding with plaintiff's counsel
that resulted in this latest amendment to the merger agreement.
Pursuant to such amendment, which has been approved by both companies' Boards
of Directors, the exchange ratio has been revised to allow Marquee stockholders
to benefit from the potential increase in the stock price of SFX. Under the new
amendment, if the price of SFX Entertainment Class A common stock is above
$60.00, Marquee stockholders will receive an additional $0.10, or proportional
part of such an amount, above the originally agreed to $4.75 worth of SFX stock
for every dollar, or portion of a dollar, that the SFX stock price exceeds
$60.00 up to $66.00. If the price of SFX stock is greater than $66.00 per
share, the exchange ratio is adjusted to provide Marquee stockholders $5.35
worth of SFX stock. This adjustment will result in at most an additional
156,000 shares of SFX stock being issued in the merger. In all cases, the price
of SFX stock to be used in these calculations is the average of the last
reported sale price of the SFX Entertainment Class A common stock for fifteen
consecutive trading days ending five days before the merger is consummated. The
transaction remains subject to the approval of the shareholders of Marquee as
well as certain regulatory requirements.
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Robert F.X. Sillerman, Executive Chairman of SFX Entertainment, stated, "We
look forward to completing this important transaction for SFX. With this
adjustment in terms, we have allowed Marquee shareholders a greater chance to
participate in some of our stock's upside potential prior to their actually
receiving our shares. This is reflective of our continuing enthusiasm for
Marquee and our eagerness to begin the process of combining our strengths in
sports and event management capabilities."
Robert M. Gutkowski, President and Chief Executive Officer of Marquee, stated,
"We are happy to have been able to further enhance this transaction for our
stockholders and look forward to the many benefits of the combination of
Marquee and SFX."
Marquee provides integrated event management, television production, marketing,
talent representation and consulting services in the sports, news and other
entertainment industries. The company provides production and promotion
services to major sporting events, sports television shows and professional and
collegiate leagues and organizations. In conjunction with these services, it
also offers consulting services for the development and implementation of
corporate sponsorship campaigns which are designed to promote an event, team or
sponsor. Marquee also represents sports and media personalities and has a
roster of clients including athletes, broadcasters and media executives. In
addition, Marquee is an established provider of television programming services
in the field of international sports.
SFX Entertainment is the largest diversified promoter, producer and venue
operator for live entertainment events in the United States. It owns and/or
operates the largest network of venues in the country used principally for
music concerts and other live entertainment events. Upon completion of all
pending acquisitions, it will have 71 venues either directly owned or operated
under lease or exclusive booking arrangements in 29 of the top 50 markets,
including 14 amphitheaters in 9 of the top 10 markets. The company also
develops and manages touring Broadway shows, selling subscription series in 38
of the markets that maintain active touring schedules with approximately
240,000 subscribers last year. Through its large number of venues, its strong
market presence and the long operating histories of the businesses it has
acquired, SFX operates an integrated franchise that promotes and produces a
broad variety of live entertainment events locally, regionally and nationally.
Pro forma for all completed and pending acquisitions, during the latest twelve
months, over 32 million people attended approximately 11,650 events promoted
and/or produced by SFX, including over 5,200 music concerts, 5,700 theatrical
shows and 300 specialized motor sports shows. SFX also represents many
prominent and prestigious athletes and broadcasters for contract and marketing
services.
This press release includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Because these statements apply to future events, they are
subject to risks and uncertainties that could cause actual results to differ
materially, including the absence of SFX's and Marquee's combined operating
history and potential inability to integrate acquired businesses, need for
additional financing, high degree of leverage, granting of rights to acquire
certain portions of SFX's operations, variable economic conditions and consumer
tastes, restrictions imposed by existing debt and future payment obligations.
Important factors that could cause actual results to differ materially are
described in SFX's and Marquee's reports on Forms 10-K and 10-Q and other
filings with the Securities and Exchange Commission.
