<PAGE> 1
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): July 22, 1994
JONES INTERCABLE, INC.
(Exact name of registrant as specified in its charter)
Colorado 1-9953 84-0613514
(State of Organization) (Commission File No.) (IRS Employer
Identification No.)
P.O. Box 3309, Englewood, Colorado 80155-3309 (303) 792-3111
(Address of principal executive office and Zip Code (Registrant's
telephone no.
including area code)
<PAGE> 2
Item 5. Other Events.
The Exchange Transactions and the ADS Offerings.
On July 22, 1994, Jones Intercable, Inc. and certain of its wholly
owned subsidiaries (collectively, the "Company") transferred all of their
interests in their cable/telephony properties in the United Kingdom to Bell
Cablemedia plc, a public limited company incorporated under the laws of England
and Wales ("Bell Cablemedia") in exchange for 6,035,648 American Depositary
Shares ("ADSs") representing 30,178,240 Ordinary Shares of Bell Cablemedia. At
the closing, the Company transferred its equity interests in the companies that
own the Leeds, South Hertfordshire, Norwich, Peterborough, Broadland and
Fenland franchises and the Company's equity interest in and shareholder loans
to ELT Acquisition Company Limited to Bell Cablemedia. Also on July 22, 1994,
Jones Global Group, Inc., a corporation owed 38% by the Company and 62% by
Jones International, Ltd., a corporation that through its indirect
shareholdings owns a controlling interest in the Company, and certain of Global
Group's wholly owned subsidiaries (Jones Global Group, Inc. and its wholly
owned subsidiaries are herein collectively referred to as "Global Group") also
transferred all of their interests in their cable/telephony properties in the
United Kingdom to Bell Cablemedia in exchange for 3,663,584 ADSs representing
18,317,920 Ordinary Shares of Bell Cablemedia, of which 1,100,000 ADSs
representing 5,500,000 Ordinary Shares were sold on July 22, 1994 in connection
with Bell Cablemedia's initial public offering. At the closing, Global Group
transferred its equity interests in the companies that own the Leeds and
Aylesbury-Chiltern franchises, its general partner interest in Jones United
Kingdom Fund, Ltd. and the assets of its United Kingdom management subsidiary
to Bell Cablemedia. As a result of these transactions, the Company and Global
Group no longer own any direct interest in cable/telephony properties in the
United Kingdom; the Company and Global Group do, however, own indirect
interests in cable/telephony properties in the United Kingdom through their
respective 9.7% and 4.2% ownership of Bell Cablemedia. Messrs. Glenn R. Jones
and Patrick J. Lombardi, directors and officers of both the Company and Global
Group, have become members of the board of directors of Bell Cablemedia. Mr.
Alan C. Bates, who until July 22, 1994 was the Managing Director of Global
Group's subsidiary, Jones Cable Group, Ltd., has been appointed the chief
executive officer and a member of the board of directors of Bell Cablemedia.
Mr. Bates also currently is the chairman of the U.K. Cable Television
Association.
Prior to the closing of these transactions, Bell Cablemedia was
indirectly owned 80% by Bell Canada International Inc. ("BCI") and 20% by
-2-
<PAGE> 3
Cable & Wireless plc ("C&W"). BCI has recently acquired a 12.7% equity
interest in the Company and has signed a definitive agreement (expected to
close in December 1994) to purchase such number of shares of the Company as to
increase its holding in the Company to a 30% equity interest. BCI also has
signed a definitive agreement to purchase an option to acquire a controlling
interest in the Company at some date in the future.
On June 10, 1994, Bell Cablemedia filed a registration statement with
the Securities and Exchange Commission (the "SEC") in connection with the
offerings in the United States and internationally of 12,000,000 ADSs by Bell
Cablemedia and 1,100,000 ADSs by Global Group (the "ADS Offerings"). Bell
Cablemedia also filed a registration statement with the SEC in connection with
the offering of 11.95% Senior Discount Notes due 2004 (the "Notes Offering").
The ADS Offerings registration statement and the Notes Offering registration
statement were both declared effective by the SEC on July 15, 1994. The
initial offering price for the ADSs was $17.00 per ADS. The ADS Offerings,
which closed on July 22, 1994, provided net cash proceeds of approximately
$184.4 million to Bell Cablemedia and the Notes Offering, which also closed on
July 22, 1994, provided net cash proceeds of approximately $263.1 million to
Bell Cablemedia.
The ADS offerings provided net cash proceeds of $17,547,888 to Global
Group. The proceeds from the sale of the ADSs by Global Group are intended to
allow it to satisfy expected U.S. tax liabilities in connection with the
transactions.
The ADSs received by the Company are "restricted securities" within
the meaning of Rule 144 promulgated under the Securities Act of 1933 (the
"Securities Act"), and the Company will not be able to sell its ADSs unless an
exemption from registration under the Securities Act is available or unless its
ADSs are registered by a subsequent registration statement. Prior to Bell
Cablemedia's initial public offering, there was no public market for its
Ordinary Shares (in the form of ADSs or otherwise). The ADSs are now quoted on
the NASDAQ National Market System under the symbol "BCMPY." Bell Cablemedia,
BCI, C&W, the Company and Global Group have agreed that, for a period of 180
days after July 15, 1994 (the date of the definitive prospectuses used in Bell
Cablemedia's ADS Offerings), they will not sell or otherwise dispose of any
ADSs or Ordinary Shares of Bell Cablemedia (except for those ADSs received by
Global Group that were sold as part of the ADS Offerings) without the prior
written consent of the lead U.S. underwriters of the ADS Offerings. Pursuant
to the terms of a principal shareholders registration rights
-3-
<PAGE> 4
agreement, Bell Cablemedia has granted certain demand and piggy-back
registration rights to BCI, C&W, the Company and Global Group. With the
exception of demand registration rights relating to the ADSs issued to C&W, the
Company and Global Group on July 22, 1994 in connection with the
above-described transactions, which become exerciseable approximately three
years from July 15, 1994, the registration rights granted by the principal
shareholders registration rights agreement become exercisable 180 days
following July 15, 1994. In all cases, however, the registration rights are
subject to certain limitations, including the provision that demand
registration rights may not be exercised within 90 days after the effective
date of Bell Cablemedia's most recent registration statement. In addition,
pursuant to the terms of a separate registration rights agreement, Bell
Cablemedia has agreed to file promptly with the SEC a registration statement
covering all of the ADSs received by the Company and Global Group in connection
with Bell Cablemedia's acquisition of the United Kingdom holdings of the
Company and Global Group (except for those ADSs received by Global Group that
were sold as part of the ADS Offerings) and to keep such registration statement
effective for a period of approximately three years from the closings of the
ADS Offerings. Although they have no current plans to sell any of their ADSs,
the Company and Global Group anticipate that they will be able to sell their
ADSs pursuant to this registration statement 180 days following July 15, 1994.
After giving effect to Bell Cablemedia's acquisition of the United
Kingdom holdings of the Company and Global Group and the closings of the ADSs
Offerings on July 22, 1994, BCI indirectly owns approximately 42.2%, C&W
indirectly owns approximately 12.8%, the Company owns approximately 9.7% and
Global Group owns approximately 4.2% of the issued and outstanding shares of
Bell Cablemedia.
Bell Cablemedia has agreed to pay certain of the legal fees and
expenses of the Company and its affiliates associated with the negotiation and
closings of the exchange transactions and the ADS Offerings. Bell Cablemedia
also has agreed to provide the Company with such financial information as
required by the Company to reflect its interest in Bell Cablemedia in its
financial statements and tax returns.
The Company paid an advisory fee of 414,854 pounds ($632,569 at the
$1.5248 per pound exchange rate in effect on July 26, 1994) to Jones Financial
Group, Ltd., a wholly owned subsidiary of Jones International, Ltd., for its
services to the Company in connection with the aforementioned transactions.
Global Group paid an advisory fee of 251,812 pounds ($383,963 at the
$1.5248 per
-4-
<PAGE> 5
pound exchange rate in effect on July 26, 1994) to Jones Financial Group, Ltd.
for its services to Global Group in connection with the aforementioned
transactions. Mr. Glenn R. Jones owns all of the outstanding shares of Jones
International, Ltd.
The Shareholders Agreement.
BCI, C&W, the Company and Global Group (the Company and Global Group
are herein collectively referred to as the "Jones Entities") have entered into
a shareholders agreement relating to their holdings in Bell Cablemedia. The
shareholders agreement provides that each of BCI, C&W and the Jones Entities is
entitled to nominate directors for election to Bell Cablemedia's board of
directors according to its shareholdings in Bell Cablemedia and for each of
them to use its votes at general meetings in support of the election of such
nominees as directors of Bell Cablemedia. Under these provisions, BCI
currently has the right to nominate five directors (including the chief
executive officer and the chief financial officer, subject to the approval of
the board of directors) and C&W and the Jones Entities currently each have the
right to nominate two directors. The number of directors that each of BCI, C&W
and the Jones Entities are entitled to nominate is dependent on each of their
interests in Bell Cablemedia from time to time based broadly on one director
for every 8% interest except that each of them may nominate two directors until
their interest falls below 10% and one director until their interest falls
below 5%. In addition, each of BCI, C&W and the Jones Entities is entitled to
have one observer present at meetings of Bell Cablemedia's board of directors
and, unless the board of directors determines otherwise, to be represented on
committees of the board of directors and on the boards of directors of
subsidiaries of Bell Cablemedia.
The shareholders agreement also requires each of BCI, C&W and the
Jones Entities, respectively, to offer any Ordinary Shares or ADSs of Bell
Cablemedia which it wishes to sell to the others before selling to any third
party. In addition, before purchasing Ordinary Shares or ADSs of Bell
Cablemedia from any third party, each of BCI, C&W and the Jones Entities,
respectively, are obliged to offer to purchase such Ordinary Shares or ADSs
from the others.
The parties to the shareholders agreement have also agreed to procure
that in the future when new Ordinary Shares or ADSs are issued by Bell
Cablemedia for cash, each of BCI, C&W and the Jones Entities (but not
necessarily any other shareholder) is given the opportunity to participate in
the offering on a basis which is pro rata to their respective interests in Bell
-5-
<PAGE> 6
Cablemedia, except where the issue is pursuant to Bell Cablemedia's share
option plans or the conversion of certain notes issued by Bell Cablemedia in
connection with its acquisition of the York, Harrogate, Wearside and Worcester
franchises. This right also does not apply when Ordinary Shares or ADSs are
issued in consideration for the acquisition of shares or assets of other
entities by Bell Cablemedia.
The Technical Assistance Agreement.
The Company has entered into a technical assistance agreement with
Bell Cablemedia under which the Company has agreed, on reasonable request, to
provide to Bell Cablemedia, or procure the provision by an affiliate of,
consulting services, research and development resources, management services
and technical assistance in relation to telecommunications services. The
charge for such services or for the provision of employees to Bell Cablemedia
on secondment will generally be based upon the provider's direct costs
(including direct overhead except in the case of secondees) plus an additional
amount of 15% of such costs. The technical assistance agreement is terminable
by either party at any time on three months' notice following the date upon
which the Company no longer has the right to nominate a director for election
to the board of directors of Bell Cablemedia pursuant to the shareholders
agreement.
Indemnification Agreements.
Bell Cablemedia has agreed to indemnify the Company, Global Group and
their affiliates in respect of all costs, expenses, losses, liabilities and
damages suffered or incurred by them resulting from any untrue statement or
omission contained in any registration statement or prospectus relating to the
ADS Offerings or the Note Offerings other than costs, expenses, losses,
liabilities and damages resulting from any information in such documents
relating to the Company, Global Group or their affiliates provided to Bell
Cablemedia by the Company, Global Group or their affiliates. The Company,
Global Group and their affiliates have agreed to indemnify Bell Cablemedia in
respect of all costs, expenses, losses, liabilities and damages suffered or
incurred by Bell Cablemedia resulting from any untrue statement or omission
contained in any registration statement or prospectus relating to the ADS
Offerings or the Note Offerings relating to the Company, Global Group or their
affiliates provided to Bell Cablemedia by the Company, Global Group or their
affiliates.
-6-
<PAGE> 7
Pursuant to a cross-indemnity agreement, Bell Cablemedia has agreed
to indemnify the Company for any amounts that the Company may be called upon to
pay in connection with certain performance bonds guaranteed by the Company as a
shareholder of ELT Acquisition Company Limited.
-7-
<PAGE> 8
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 hereunto duly authorized.
JONES INTERCABLE, INC.,
a Colorado corporation
Dated: August 4, 1994 By: /s/ ELIZABETH M. STEELE
Elizabeth M. Steele
Vice President
-8-
