Exhibit 99
IBERO AMERICAN MEDIA PARTNERS, PARENT OF CISNEROS
TELEVISION GROUP, AND EL SITIO TO MERGE, CREATING
CLAXSON INTERACTIVE GROUP (CIG), THE FIRST MOVER IN
CONVERGENCE OF NEW AND TRADITIONAL MEDIA IN IBERO
AMERICA
CIG will unify programming, broadcasting and Internet assets to create an
integrated content company providing branded content, entertainment,
information and communications via multiple platforms
El Sitio Co-Founder Roberto Vivo named Chairman and CEO of the
Claxson Interactive Group
New York, N.Y., Miami Beach, Florida and Buenos Aires, Argentina OCTOBER 30,
2000 -- Ibero American Media Partners (IAMP), a joint venture of the Cisneros
Group of Companies and Hicks, Muse, Tate & Furst Incorporated (Hicks Muse),
the parent company of Cisneros Television Group, and El Sitio (Nasdaq: LCTO),
a leading Internet media company providing original and interactive content
for Spanish and Portuguese speakers, today announced that they have entered
into a definitive merger agreement. The combined entity, Claxson Interactive
Group (CIG), will be a leading integrated content company targeted to Spanish
and Portuguese speakers around the world and the first independent content
company in Latin America to be publicly traded. Until the transaction closes
and CIG's new ticker symbol are announced, El Sitio will continue trading
under the ticker symbol LCTO.
Claxson Interactive Group will combine assets in pay television, broadcast
radio and television, and the Internet to create a leading media company with
multiple-platform distribution, a strong stable of popular consumer brands
and a solid financial position. CIG will be composed of:
- Cisneros Television Group, a leading provider of entertainment brands in
pay television and the Internet in Ibero America and around the world;
- IAMP's broadcast television and radio assets including Chilevision,
Radio Chile and an interest in Caribbean Communications Network
(CCN); and
- El Sitio, including its existing businesses in Argentina, Brazil, Chile,
Colombia, Mexico, the United States and Uruguay.
Additionally, Cisneros Television Group has signed a deal to distribute
certain content from its pay television channels through AOL Latin America
(Nasdaq: AOLA). Initially, the agreement will cover the Cl@se and Infinito
channels. Separately, El Sitio has announced that it intends to sell its ISP
business that operates throughout the region, in order to focus exclusively
on the development of branded entertainment content.
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Under the terms of the merger agreement, which has been approved by the
boards of directors of both IAMP and El Sitio, each El Sitio common share
currently outstanding will be exchanged for one new common share of Claxson
Interactive Group. The current El Sitio shareholders, including IAMP, which
has an approximately 18% fully diluted ownership stake, will own 41.5% of
CIG's common shares. The combined company will have approximately 109.5
million common shares outstanding, of which 37% will be held by the Cisneros
Group of Companies, 29% by Hicks Muse, and 34% by current shareholders of El
Sitio (excluding IAMP). On a pro forma basis for the 12 months ended June 30,
2000, the combined company had total net revenues of approximately $119
million, available cash of approximately $119 million, long-term debt of
approximately $116 million and shareholders equity of $409 million.
Roberto Vivo, Chairman and co-founder of El Sitio, will become Chairman and
CEO of Claxson Interactive Group. In his new position, Mr. Vivo will oversee
the implementation of the integrated media company's growth strategy,
focusing on the combined benefits of leveraging traditional and new media
platforms, as well as the development of unique interactive content.
Claxson Interactive Group will bring together experienced management,
technology, creative resources and premier long-term shareholders. These
resources will allow the company to deliver a variety of high-quality content
to a substantial number of consumers via multiple delivery platforms,
including cable television, Direct-to-Home Satellite television (DTH),
broadcast television and radio and the Internet. Through the merger, CIG will
offer one-stop shopping for advertisers, realize cost savings and e-commerce
possibilities, and will develop new content and cross-promotional
partnerships.
As CEO, Mr. Vivo will oversee three strategic operating units at CIG: Pay
Television, Broadcast and Internet. Jay Scharer, Executive Vice President and
COO of CTG, will become President of Pay Television; El Sitio's President and
CEO, Roby Cibrian will become President of Internet; and Chilevision
President Jaime Vega will be President of Broadcast Operations. El Sitio's
CFO, Horacio Milberg will assume the role of CFO at the combined company.
Cisneros Television Group CFO Benjamin Moody, will become Executive Vice
President of Corporate Strategy and Development. All will report directly to
Mr. Vivo.
Claxson Interactive Group will have a ten-member Board of Directors composed
of three Directors nominated by Cisneros Group of Companies; two Directors
nominated by Hicks, Muse, Tate & Furst; one Director representing El Sitio's
founding shareholders; Claxson Interactive Group's CEO (currently Mr. Vivo);
and three independent Directors.
Gustavo Cisneros, Chairman and CEO of Cisneros Group, commented, "We are
pleased that Cisneros Television Group and the other assets of our joint
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venture Ibero American Media Partners will combine with El Sitio to be Ibero
America's first mover as a next generation media company, poised to deliver
branded content across multiple platforms. Claxson Interactive Group, with
its incredible spectrum of branded content, will be a terrific complement to
our other Cisneros Group businesses, including AOL Latin America and Galaxy
Latin America, the exclusive provider of DIRECTV service for Latin America.
CIG will be able to draw on a powerful stable of consumer brands, great
creative talent, and the unprecedented power of the interactive medium, while
enjoying a solid financial position and recognizing tremendous economies of
scale. We will be in a unique position to create programming that will be
intended from its inception to be distributed simultaneously in multiple
platforms."
Thomas O. Hicks, Chairman and CEO of Hicks, Muse, Tate and Furst, said, "This
transaction is consistent with our firm's strategic objective of leading the
convergence of traditional and new-economy businesses, particularly in the
media sector. The combination of Ibero American Media Partners and El Sitio
will create a new company greater than the sum of its parts and well
positioned to revolutionize the delivery of content to the high-growth Latin
American market. It is also representative of our objective to be a leader in
the consolidation of Latin American media, through which we can create
companies with solid cash positions, effective cost structures and the
ability to create value for all of their constituencies. We look forward to
this next chapter in our long-standing relationship with the Cisneros Group
and the El Sitio team as we work together to integrate these two outstanding
companies."
Mr. Vivo said, "We have always focused on providing our users a fully
interactive experience online, offering them top-quality content that
addresses the needs and tastes of each local market. Claxson Interactive
Group enhances our ability to build value for our shareholders in a
converging world, with an unprecedented breadth and scope of locally
developed and internationally recognized content at its disposal. The access
to brands such as MuchMusic, Infinito, Locomotion, HTV and Playboy TV will
provide us with an invaluable opportunity to develop unique content for the
Internet that has never been seen before.
"We will have a superb stable of content-driven brands that have already
captured the audiences of Ibero America and beyond. The merged company will
share a corporate culture of rapid decision making, creative innovation and
an international standard of professionalism, allowing us to quickly
integrate and immediately focus on bringing unique products to the consumer,"
added Mr. Vivo.
Completion of the transaction is subject to the approval of El Sitio's
shareholders, as well as customary closing conditions. El Sitio's largest
shareholders, including Ibero American Media Partners, Grupo Liberman and
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IMPSAT Fiber Networks, Inc. (Nasdaq: IMPT) have indicated they will vote in
favor of the transaction. Assuming all necessary approvals are received, the
parties anticipate completing the merger in the first quarter of 2001.
Violy, Byorum & Partners advised the Cisneros Group of Companies; Bear,
Stearns & Co. Inc. advised Hicks, Muse, Tate & Furst; and Credit Suisse First
Boston advised El Sitio in this transaction.
Combined Company's Assets
Cisneros Television Group comprises a number of leading content brands,
including:
- Space offers 24 hours of the best selection of U.S., Spanish language and
international movies - more movies less repetition
- I.Sat, a film channel with a mix of cutting edge shows, original content
and music
- Uniseries, features an eclectic mix of classic and contemporary television
hits for the whole family to enjoy -classic TV series we all grew up with
- Jupiter, the best comedy series from Latin America and the world
- Infinito, a documentary channel that explores and exposes an alternative
reality
- Much Music, showcases 24 hours a day of hits, music videos and live
music programming
- HTV, showcases the best and latest in Latin music 24 hours a day
- Locomotion, animation for young adults in the digital era
- Cl@se, a multimedia educational service reaching more than 38,000
schools in Latin America
- Playboy TV International, the highest quality adult programming for
Latin America and the rest of the world
- Spice, the all-movie adult service featuring exclusive and premiere films
- Venus, the only adult content channel worldwide that is originally
produced and aired in Spanish
- AEI Music Latin America, a digital service providing more than 20
channels of audio; and,
- A 50-50 joint venture with ARTISTdirect.com to create a proprietary
ARTISTdirect.com service for the Spanish- and Portuguese-language
markets.
El Sitio is a provider of proprietary interactive content, developed at the
local level and targeted to the diverse cultures of the Spanish and
Portuguese speaking audiences throughout the Americas. El Sitio's interactive
content is organized around four compelling areas of interest: Relationships,
Current Events, Entertainment and Technology, to create and drive loyalty
among its dynamic community of users. Several of El Sitio s unique content
offerings, such as Cupido.net; Mujer, Mujer; and El Sitio3D, have developed
into well-recognized brands among Internet users in Latin America.
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The broadcasting assets of Ibero American Media Partners, which will be
merged into the combined company are Radio Chile, a premier group of 8 radio
networks which represent 40% of the Chilean radio market; Chilevision, a
leading broadcast television channel in Chile; and CCN, the leading pan-
regional English-language broadcast television channel in the Caribbean.
This release contains forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. These statements are based on management's current expectations or
beliefs and are subject to a number of factors and uncertainties that could
cause actual results to differ materially from those described in the
forward-looking statements. The forward-looking statements in this release
address, among others, the following subjects: expected timing of closing of
the transaction; future financial and operating results; and timing and
benefits of the transaction.
The following factors, among others, could cause actual results to differ
materially from those described in the forward-looking statements: the risk
that El Sitio and the assets of the Cisneros Group and Hicks, Muse, Tate and
Furst will not be integrated successfully; costs related to the transaction;
inability to obtain, or meet conditions imposed for, governmental and third
party approvals for the merger; inability to further identify, develop and
achieve commercial success for new products, services and technologies;
increased competition and its effects on pricing, spending, third-party
relationships, the subscriber base and revenues; inability to establish and
maintain relationships with commerce, advertising, marketing, technology and
content providers; risk of accepting warrants in certain agreements; risks of
new and changing regulations.
For a detailed discussion of these and other
cautionary statements, please refer to El Sitio's periodic filings with the
U.S. Securities and Exchange Commission.
Press contacts:
Cisneros Group of Companies
Susan Ainsworth
212-355-0620
[email protected]
Hicks, Muse, Tate & Furst
Mark Semer
Kekst and Company
212-521-4802
[email protected]
Cisneros Television Group
Alfredo Richard
305-815-6209
[email protected]
El Sitio
Erich De la Fuente
305-606-8641
[email protected]
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