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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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):
October 20, 1998 (October 16, 1998)
SFX ENTERTAINMENT, INC.
(Exact name of registrant as specified in charter)
Delaware 0-24017 13-3977880
(State or Other Jurisdiction of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
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.
SFX Entertainment, Inc. ("SFX") and its wholly owned subsidiary, SFX
Acquisition Corp. ("Sub"), entered into an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of July 23, 1998, with The Marquee Group, Inc.
("Marquee"), pursuant to which Sub will be merged with and into Marquee (the
"Merger") and Marquee shall continue as the surviving corporation of the
Merger. SFX entered into Amendment No. 3 to the Merger Agreement
("Amendment No. 3"), dated as of October 16, 1998, pursuant to which, among
other things, Marquee shareholders will receive in the Merger 0.1111 shares of
SFX Class A common stock for each share of Marquee common stock. However, 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 is greater
than $42.75, the Marquee shareholders will be entitled to 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 such average SFX Class A
common stock price.
The consummation of the Merger remains subject to the satisfaction of
a number of conditions, including the approval of the shareholders of Marquee
and the expiration or termination of any applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976. It is anticipated that
the Marquee shareholders' meeting will be held in December of 1998.
The foregoing description of Amendment No. 3 does not purport to be
complete and is qualified in its entirety by the copy of Amendment No. 3
attached hereto as an exhibit.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
Exhibit 2.1 Amendment No. 1, dated as of September 21, 1998, to
the Agreement and Plan of Merger among SFX
Entertainment, Inc., SFX Acquisition Corp. and The
Marquee Group, Inc., incorporated herein by
reference to Exhibit 2.1 to the Form 8-K for The
Marquee Group, Inc., File No. 0-21711, filed with
the Securities and Exchange Commission on October 9,
1998.
Exhibit 2.2 Amendment No. 2, dated as of October 5, 1998, to the
Agreement and Plan of Merger among SFX
Entertainment, Inc., SFX Acquisition Corp. and The
Marquee Group, Inc., incorporated herein by
reference to Exhibit 2.2 to the Form 8-K for The
Marquee Group, Inc., File No. 0- 21711, filed with
the Securities and Exchange Commission on October 9,
1998.
Exhibit 2.3 Amendment No. 3, dated as of October 16, 1998, to
the Agreement and Plan of Merger among SFX
Entertainment, Inc., SFX Acquisition Corp. and The
Marquee Group, Inc.
Exhibit 99.1 Joint Press Release, dated October 19, 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: October 19, 1998
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EXHIBIT INDEX
Exhibit 2.1 Amendment No. 1, dated as of September 21, 1998, to
the Agreement and Plan of Merger among SFX
Entertainment, Inc., SFX Acquisition Corp. and The
Marquee Group, Inc., incorporated herein by reference
to Exhibit 2.1 to the Form 8-K for The Marquee Group,
Inc., File No. 0-21711, filed with the Securities and
Exchange Commission on October 9, 1998.
Exhibit 2.2 Amendment No. 2, dated as of October 5, 1998, to the
Agreement and Plan of Merger among SFX Entertainment,
Inc., SFX Acquisition Corp. and The Marquee Group,
Inc., incorporated herein by reference to Exhibit 2.2
to the Form 8-K for The Marquee Group, Inc., File No.
0- 21711, filed with the Securities and Exchange
Commission on October 9, 1998.
Exhibit 2.3 Amendment No. 3, dated as of October 16, 1998, to the
Agreement and Plan of Merger among SFX Entertainment,
Inc., SFX Acquisition Corp. and The Marquee Group,
Inc.
Exhibit 99.1 Joint Press Release, dated October 19, 1998
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AMENDMENT NO. 3
TO
AGREEMENT AND PLAN OF MERGER
AMONG
SFX ENTERTAINMENT, INC.,
SFX ACQUISITION CORP.
AND
THE MARQUEE GROUP, INC.
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AMENDMENT NO. 3 TO AGREEMENT AND PLAN OF MERGER dated as of October 16,
1998, 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 Amendment No.
1 and Amendment No. 2 to the Merger Agreement, pursuant to which, among other
things, the parties amended Section 6.01(a) of 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 is advisable and in
the best interests of Marquee and its stockholders, (b) has approved and
adopted this Amendment and the Transactions and (c) has recommended the
approval and adoption of the Merger Agreement and the approval of 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 is in the best interests of SFX and
its stockholders and has approved and adopted 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 .1111 of a
share of SFX Class A Common Stock; and
(ii) if the SFX Class A Common Stock Price is greater than $42.75,
then 'Exchange Ratio' shall 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.
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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 opinion delivered pursuant to Section 3.14 of the Merger
Agreement.
3. SFX hereby represents to Marquee that it has received the written
opinion of the SFX Banker on the date of this Amendment to the effect that the
Merger Consideration (giving effect hereto) 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 opinion delivered pursuant to Section 4.11 of the Merger
Agreement.
4. Section 2.01(a)(iv) is hereby amended by adding a closing parenthesis
after the words "issuable thereunder" at the end of the second sentence.
5. The first sentence of Section 6.01(a) of the Merger Agreement is hereby
amended by deleting the words "85 days" and inserting the words "105 days" in
lieu thereof.
6. Section 7.01(e) of the Merger Agreement is hereby deleted in its
entirety and replaced by the following:
"(e) any applicable waiting period under the HSR Act relating to the
Merger shall have expired or been terminated; provided, however, that the
condition set forth in this Section 7.01(e) shall be deemed satisfied if such
waiting period is terminated on the condition that SFX divest of, or take any
other action with respect to, any interest to be acquired by it in QBQ
Entertainment, Inc., provided that Marquee cooperates with SFX if any action is
to be taken prior to the Closing;"
7. Section 8.01(b) of the Merger Agreement is hereby amended by deleting
the words "March 31, 1999" and inserting the words "April 30, 1999" in lieu
thereof.
8. Section 8.01(h) is hereby amended by adding the word "or" after the
semicolon.
9. Section 8.01 (i) is hereby amended by deleting ";or" and inserting "."
in lieu thereof.
10. Section 8.01(j) of the Merger Agreement is hereby deleted in its
entirety.
11. Section 8.02(b) of the Merger Agreement is hereby amended by deleting
"$1,800,000" and inserting "$900,000" in lieu thereof.
12. Section 8.02(c) of the Merger Agreement is hereby amended by deleting
"$1,000,000" and inserting "$500,000" in lieu thereof.
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13. 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.
14. 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.
15. Assuming that the representations and warranties of Marquee contained
in Section 3.07 of the Merger Agreement are true and correct, SFX has
determined that Marquee's historical financial performance, as reported in the
Marquee SEC Reports for the six months ended June 30, 1998, is satisfactory to
SFX for purposes of the Merger Agreement.
16. Except to the extent expressly set forth in this Amendment No. 3 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. 3 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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SFX ENTERTAINMENT, INC. AND THE MARQUEE GROUP, INC. ENTER INTO AN AMENDMENT TO
THE MARQUEE MERGER AGREEMENT
NEW YORK--(BUSINESS WIRE)--Oct. 19, 1998--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.
The merger agreement was amended to provide, among other things, that in the
proposed merger, Marquee shareholders will receive 0.1111 shares of SFX
Entertainment Class A common stock for each share of Marquee common stock.
However, 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 is consummated is greater than $42.75, the Marquee shareholders will be
entitled to 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 such average SFX Class A common stock price. The transaction remains subject
to the approval of the shareholders of Marquee as well as certain regulatory
requirements. It is anticipated that the Marquee shareholders' meeting will be
held in December of 1998.
Robert F.X. Sillerman, Executive Chairman of SFX Entertainment, stated, "While
the market and financial conditions made it necessary to restructure the terms
of the Marquee merger agreement, our enthusiasm for Marquee and its management
team remains high and we believe that adding Marquee and its stellar roster of
players, broadcasters and events to our existing powerful sports and event
management and presentation capabilities will import great benefits to both our
clients and our shareholders."
Robert M. Gutkowski, President and Chief Executive Officer of Marquee, stated,
"We are pleased to have been able to restructure the transaction and to
continue to provide our shareholders with the opportunity to benefit from a
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 a leading promoter, producer and venue operator for live
entertainment events. 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 72 venues
either owned or operated under lease or exclusive booking arrangements in 29
of the top 50 markets, including 15 amphitheaters in 9 of the top 10 markets.
The company also develops and manages touring Broadway shows, selling
subscription series in 39 of the estimated 60 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. During 1997, approximately
30 million people attended 11,300 events promoted and/or produced by SFX,
including approximately 5,400 music concerts, 5,600 theatrical shows and over
200 specialized motor sports events. SFX also represents many prominent and
impactful athletes through its ownership of FAME.
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 company's absence of 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 the company'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 the company's reports on Forms 10-K and 10-Q and
other filings with the Securities and Exchange Commission.
CONTACT: Timothy J. Klabs
Director, Investor Relations
SFX Entertainment, Inc.
(212) 407-9126
