Exhibit C
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 is 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.
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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.
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.
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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 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
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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 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.
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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 and 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.
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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]
