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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): SEPTEMBER 22, 1998
(SEPTEMBER 11, 1998)
SFX ENTERTAINMENT, INC.
(Exact Name of Registrant as Specified in Charter)
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DELAWARE 0-24017 13-3977880
<S> <C> <C>
(State or Other Jurisdiction of (Commission File No.) (IRS Employer Identification No.)
Incorporation)
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650 MADISON AVENUE, 16TH FLOOR, NEW YORK, NEW YORK 10022
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 838-3100
N/A
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
Magicworks Acquisition
On September 11, 1998, MWE Acquisition Corp. ("Acquisition Sub"), a
wholly owned subsidiary of SFX Entertainment, Inc. (the "Company"), acquired
26,386,679 shares of common stock, par value $.001 per share, of Magicworks
Entertainment Incorporated ("Magicworks"), representing approximately 98.7% of
Magicworks' outstanding shares of common stock, for a cash price of $4.00 per
share. The shares were purchased pursuant to a tender offer that was commenced
on August 13, 1998 to acquire all of the outstanding shares of Magicworks'
common stock. On September 11, 1998, Acquisition Sub merged with and into
Magicworks. Upon consummation of the merger, Magicworks became a wholly-owned
subsidiary of the Company, and the shareholders of Magicworks who did not
tender their shares became entitled to receive $4.00 per share in cash. The
total purchase price for Magicworks was approximately $120.0 million for the
tendered shares and all remaining outstanding shares, including certain
additional amounts to be paid in respect of outstanding stock options, warrants
and transaction expenses. Magicworks is engaged in the management, production,
presentation and merchandising of theatrical shows, musical concerts and other
forms of live entertainment. Magicworks also provides personal representation
and sports marketing services to professional athletes in such sports as figure
skating, baseball and tennis.
The financial information contained in Exhibits 99.1 to 99.3 hereof is
incorporated herein by reference.
Pending Acquisitions
As previously announced, the Company has entered into an agreement
to acquire The Marquee Group, Inc. ("Marquee") and a letter of intent to
acquire the Cellar Door group of companies ("Cellar Door"). Marquee provides
integrated event management, television programming and production, marketing,
talent representation and consulting services in the sports, news and other
entertainment industries. Cellar Door is a leading promoter of concerts in
the Southeast and Midwest.
In connection with filings under the Hart-Scott-Rodino Antitrust
Improvement Act of 1976, as amended (the "HSR Act"), for the acquisition of
Marquee, the Company has received notice of a preliminary inquiry from the
Antitrust Division of the U.S. Department of Justice relating to the proposed
acquisitions of Marquee and Cellar Door. In order to allow the Department of
Justice to evaluate the information provided by the Company, the Company has
agreed to re-submit its HSR Act filing for the Marquee acquisition. The Company
intends to cooperate fully with the Department of Justice inquiry. The Company
believes that the Marquee and Cellar Door acquisitions, along with the
Company's overall business and plan of acquisitions, are in compliance with
applicable antitrust laws.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
10.1 Increase Supplement, dated as of September 10, 1998, to the Credit and
Guarantee Agreement, by and between the Company and The Bank of New
York
23.1 Consent of Ernst & Young LLP
23.2 Consent of Arthur Andersen LLP
99.1 Consolidated balance sheets of Magicworks as of December 31, 1997 and
1996 and the related consolidated statements of income, stockholders'
equity and cash flows for each of the three years in the period ended
December 31, 1997 (incorporated by reference to pages F-6 through F-22
of Magicworks' annual report on Form 10-K (File No. 0-27088) for the
year ended December 31, 1997, filed with the Securities and Exchange
Commission (the "SEC") on March 31, 1998)
99.2 Consolidated balance sheets of Magicworks as of June 30, 1998 and
December 31, 1997 and the consolidated statements of income,
stockholders' equity and cash flows for the six months ended June 30,
1998 and 1997 (incorporated by reference to pages 3 through 8 of
Magicworks' quarterly report on Form 10-Q (File No. 2-96624-D) for the
six months ended June 30, 1998, filed with the SEC on August 13, 1998)
99.3 Unaudited Pro Forma Condensed Combined Financial Statements of the
Company (incorporated by reference to Annex B to Prospectus Supplement
No. 2 (Reg. No. 333-57511), filed with the SEC pursuant to
Rule 424(b)(3)on September 22, 1998)
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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 thereto duly authorized.
SFX ENTERTAINMENT, INC.
By: /s/ Thomas P. Benson
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Name: Thomas P. Benson
Title: Chief Financial Officer
Date: September 22, 1998
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INCREASE SUPPLEMENT
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INCREASE SUPPLEMENT, dated as of September 10, 1998 to the Credit and
Guarantee Agreement, dated as of February 26, 1998, by and among SFX
Entertainment, Inc. (the "BORROWER"), the Subsidiary Guarantors, the Lenders
party thereto, Goldman Sachs Credit Partners L.P. and Lehman Commercial Paper
Inc., as Co-Documentation Agents, and The Bank of New York, as Administrative
Agent (as the same may be amended, supplemented or otherwise modified from time
to time, the "CREDIT AGREEMENT"). Capitalized terms used herein that are
defined in the Credit Agreement shall have the meanings therein defined.
1. Pursuant to Section 2.3(f) of the Credit Agreement, the Borrower
hereby proposes to increase (the "INCREASE") the Aggregate Revolving Commitment
from $150,000,000 to $200,000,000.
2. The following Lender has been invited by the Borrower, and is ready,
willing and able to increase its Revolving Commitment as follows:
Revolving Commitment
Name of Lender (after giving effect to the Increase)
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The Bank of New York $90,000,000
3. The proposed effective date for the Increase is September 10, 1998.
4. The Borrower hereby represents and warrants to the Administrative
Agent, each Lender and each such proposed institution that (i) immediately
before and after giving effect to the Increase no Default exists or would exist
and (ii) immediately after giving effect thereto, the Aggregate Revolving
Commitment shall not have been increased pursuant to Section 2.3(f) of the
Credit Agreement in an aggregate amount greater than $50,000,000.
5. Pursuant to Section 2.3(f) of the Credit Agreement, by execution and
delivery of this Supplement, together with the satisfaction of all of the other
requirements set forth in Section 2.3(f), the undersigned Lender shall have, on
and as of the effective date of the Increase, a Revolving Commitment equal to
the amount set forth above next to its name.
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IN WITNESS WHEREOF, the parties hereto have caused this Increase
Supplement to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.
SFX ENTERTAINMENT, INC.
By: /s/ Thomas P. Benson
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Name: Thomas P. Benson
Title: Vice President and CFO
THE BANK OF NEW YORK, in its
individual capacity and as Administrative
Agent
By: /s/ John R. Ciulla
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Name: John R. Ciulla
Title: Vice President
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EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 333-58737) pertaining to the 1998 Stock Option and Restricted
Stock Plan and an Option Agreement of SFX Entertainment, Inc. (the "Company")
of our report dated April 11, 1996, with respect to the combined statements of
income, changes in capital and cash flows of Magicworks Entertainment
Incorporated included in its Annual Report on Form 10-K for the year ended
December 31, 1997, filed with the Securities and Exchange Commission and
incorporated by reference in the Company's Current Report on Form 8-K dated
September 18, 1998.
Ernst & Young LLP
Miami, Florida
September 18, 1998
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EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in the Form S-8 of SFX Entertainment, Inc. (File No.
333-58737) of our report dated February 23, 1998 covering the financial
statements of Magicworks Entertainment, Inc. for the years ended December 31,
1997 and 1996 included in Margicworks Entertainment, Inc.'s Form 10-K for the
year ended December 31, 1997 incorporated by reference in this Form 8-K.
/s/ Arthur Andersen LLP
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ARTHUR ANDERSEN LLP
Miami, Florida,
September 18, 1998
