UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Filed Pursuant to Section 13 OR 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 31, 1994
ORION PICTURES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-5979 13-1680528
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification
1888 Century Park East
Los Angeles, California 90067
(Address of principal executive offices)
Registrant's telephone number, including area code: (310) 282-0550
Page 1 of 23 pages
Exhibit Index begins on Page 7
<PAGE>
Item 5. Other Events
On August 31, 1994, Orion Pictures Corporation
(the "Company"), The Actava Group Inc. ("Actava"), MCEG
Sterling Incorporated ("Sterling"), International Telcell,
Inc. ("ITI") and Metromedia International Inc. ("MII"; and
together with ITI, "MITI") signed letters of intent to
combine the foregoing companies (the "Proposed Transaction")
into a new company to be called "Metromedia International
Group, Inc."
Under the terms of the Proposed Transaction, each
share of Orion common stock would be exchanged for 0.57143
shares of Actava common stock or its equivalent, each share
of Sterling common stock will be converted into Actava
common stock or its equivalent at the same 0.57143 exchange
ratio and each share of MITI common stock would be converted
into 5.5614 shares of Actava common stock or its equivalent.
The foregoing exchange ratios will be subject to certain
adjustments depending on the trading range of Actava common
stock. As a result of the Proposed Transaction, it is
currently anticipated that Actava (based on current market
prices and assuming Actava is the surviving entity in the
Proposed Transaction) would issue an additional
approximately 21,500,000 shares of common stock. Actava
currently has approximately 18,335,186 shares of common
stock outstanding. The Actava common stock to be issued to
the Company's, Sterling's and MITI's shareholders in
2
<PAGE>
connection with the Proposed Transaction will be identical
to the shares of Actava common stock currently outstanding,
except that the shares of common stock issued to Metromedia
Company and its affiliates will be entitled to three votes
per share. It is currently anticipated that Metromedia
Company and its affiliates would control in excess of 50% of
the voting power of the surviving entity as a result of the
stock exchanges contemplated by the Proposed Transaction.
It is also anticipated that in conjunction with
the Proposed Transaction, Actava will enter into an
agreement to provide up to an aggregate of $55 million of
interim financing to the other three companies on a secured
basis.
Metromedia International Group, Inc. will be
managed by a three person Office of the Chairman consisting
of John W. Kluge, the Company's current Chairman of the
Board as Chairman, Stuart Subotnick, the Company's current
Vice Chairman as Vice Chairman and John D. Phillips,
President and Chief Executive Officer of Actava, as
President.
The closing of each transaction included in the
Proposed Transaction is contingent upon the closing of each
other transaction included in the Proposed Transaction. The
consummation of the Proposed Transaction is subject, among
other things, to the successful negotiation and execution of
definitive agreements, approval of the Proposed Transaction
by the Boards of Directors and shareholders of Actava,
3
<PAGE>
Orion, Sterling, and MITI, the completion of satisfactory
due diligence investigations by each of the parties to the
Proposed Transaction, the receipt of all required lender
consents, the successful refinancing of the currently
outstanding Orion debt, and the receipt of all required
regulatory approvals, including approval with respect to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
4
<PAGE>
Item 7. Financial Statements, Pro Forma
Financial Information and Exhibits
(c) The following are exhibits to this Report and are
filed herewith:
Exhibit 99.1 Letter of Intent dated August 31,
1994, between Orion Pictures
Corporation and The Actava Group
Inc.
Exhibit 99.2 Letter of Intent dated August 31,
1994 among Orion Pictures
Corporation, The Actava Group Inc.
and MCEG Sterling Incorporated
5
<PAGE>
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.
ORION PICTURES CORPORATION
(Registrant)
By: /s/ John W. Hester
------------------------------
John W. Hester
Executive Vice President
and General Counsel
Dated: September 2, 1994
6
<PAGE>
EXHIBIT INDEX
ORION PICTURES CORPORATION
Current Report on Form 8-K
Dated August 31, 1994
Exhibit No. Description Page No.
99.1 Letter of Intent dated 8
August 31, 1994, between Orion
Pictures Corporation and The
Actava Group Inc.
99.2 Letter of Intent dated --
August 31, 1994, among Orion
Pictures Corporation, The Actava
Group Inc. and MCEG Sterling
Incorporated (Filed as Exhibit C
to Exhibit 99.1 to this Form
8-K, dated August 31, 1994, and
incorporated herein by
reference)
7
EXHIBIT 99.1
<PAGE>
THE ACTAVA GROUP INC.
4900 Georgia-Pacific Center
Atlanta, Georgia 30303
August 31, 1994
Orion Pictures Corporation
1888 Century Park East
Los Angeles, California 90067
Gentlemen:
This letter sets forth our understanding with
respect to a contemplated transaction (the "Proposed Trans-
action") between The Actava Group Inc., a Delaware
corporation ("Actava"), and Orion Pictures Corporation, a
Delaware corporation ("Orion").
1. The Proposed Transaction. The Proposed
Transaction will have the principal terms set forth on
Exhibit A hereto.
2. Conditions. Consummation of the Proposed
Transaction is subject to the following conditions: (i) ex-
ecution and delivery of definitive agreements providing for
the Proposed Transaction containing representations, warran-
ties, covenants and closing conditions which are mutually
acceptable to the parties hereto, (ii) satisfaction by the
parties hereto with the results of their respective legal
and financial due diligence of one another, (iii) approval
of the Proposed Transaction by the Board of Directors and
the shareholders of Orion and Actava, (iv) consummation of
(a) the proposed transaction between Actava and Metromedia
International Telecommunications, Inc. which is the subject
of the letter dated as of the date hereof among Actava and
Metromedia International, Inc. and International Telcell,
Inc., a copy of which is attached as Exhibit B, and (b) the
proposed transaction among Orion, Actava and MCEG Sterling
Incorporated which is the subject of the letter dated as of
the date hereof among Orion and MCEG Sterling Incorporated,
a copy of which is attached as Exhibit C, and (v) receipt of
all requisite regulatory approvals, including approval with
respect to the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
3. Press Release. Promptly after the execution
and delivery of this letter by the parties hereto,
<PAGE>
Metromedia Company and Actava shall issue a joint press
release in a form agreed upon by such parties. Thereafter,
except as may be required by applicable law or pursuant to
the rules and regulations of the New York Stock Exchange,
Inc. or the National Association of Securities Dealers
Automated Quotation System, none of the parties hereto
shall, and shall cause their respective affiliates and
representatives not to, issue or cause the publication of
any press release or other announcement with respect to the
Proposed Transaction without the consent of the other
parties hereto.
4. Expenses. Each of the parties hereto agrees
that if the Proposed Transaction is consummated, Actava will
pay the fees and expenses of the parties hereto; provided,
that, if the Proposed Transaction is not consummated, each
party will pay its own costs and expenses incurred in con-
nection with the transactions contemplated by this letter.
5. Governing Law. This letter shall be governed
by the laws of the State of New York without regard to the
conflict of laws principles thereof.
6. Non-Binding Letter. This letter merely con-
stitutes our current understanding of the Proposed Trans-
action but, except as set forth in the last sentence of this
paragraph, shall not be binding upon the parties, nor shall
it impose any obligations on the parties. Except as set
forth in the last sentence of this paragraph, no binding
obligation with respect to the Proposed Transaction will
result unless the definitive agreements are executed and
delivered by the parties. Notwithstanding the foregoing,
paragraphs 3, 4 and 5 above and this paragraph shall consti-
tute the legal, valid and binding obligation of the parties.
<PAGE>
If this letter correctly sets forth our under-
standing, please so acknowledge by signing in the space
indicated below and returning the enclosed copy of this
letter.
Very truly yours,
THE ACTAVA GROUP INC.
By: /s/ John D. Phillips
--------------------------
Name: John D. Phillips
Title: President & CEO
ACCEPTED AND AGREED:
ORION PICTURES CORPORATION
By: /s/ Leonard White
---------------------------
Name: Leonard White
Title: President and CEO
<PAGE>
Exhibit A
Business Combination with The Actava Group Inc. ("Actava") and Orion
Orion Pictures Corporation ("Orion") will enter
into a business combination as follows:
(a) Each of Metromedia Company's and
its affiliates' shares of Orion common stock
will be exchanged for .57143 shares (without
giving effect to the issuance of Orion
common stock in connection with the
acquisition being made by Orion of MCEG
Sterling Incorporated simultaneously with
the business combination described herein
(the "Sterling Issuance")) (subject to
adjustment as described in paragraph (c)
below) of newly-issued Class A common stock
of Actava/Orion, which Class A common stock
will have the same terms and conditions as
Actava's existing common stock except that
it will be entitled to 3 votes per share on
all matters voted upon by Actava's
shareholders.
(b) Simultaneously, each of the remain-
ing shares of Orion common stock will be
exchanged for .57143 shares (without giving
effect to the Sterling Issuance) (subject to
adjustment as described in paragraph (c)
below) of newly-issued Actava/Orion common
stock registered under the Securities Act of
1933, as amended, entitled to one vote per
share on all matters voted upon by Actava's
shareholders. The shares of Orion common
stock being issued to shareholders of MCEG
Sterling Incorporated ("Sterling")
simultaneously with the consummation of the
business combination described herein will
be registered under the Securities Act of
1933, as amended, entitled to one vote per
share on all matters voted upon by Actava's
shareholders and will be exchanged using the
same ratio (i.e., .57143, subject to
adjustment as described in paragraph (c))
with the number of shares of Actava/Orion
common stock being issued subject to the
maximum and minimum consideration
limitations set forth in the letter of
intent between Orion and Sterling dated the
date hereof.
(c) The number of shares of
<PAGE>
(i) Actava/Orion Class A common stock which
Metromedia Company and its affiliates will
receive in the transaction for each share of
Orion common stock, and (ii) Actava/Orion
common stock which Orion's remaining share-
holders will receive for each share of Orion
common stock, will in each such case be
adjusted if on the business day prior to the
closing date of the transaction, the average
of the closing prices of Actava common stock
on the New York Stock Exchange, Inc. for the
20 trading days prior to such date (the
"Average Closing Price") is determined to be
less than $10.50 per share, by solving for
"Y" in the following formula and dividing
"Y" by the number of shares of Orion common
stock outstanding on such date (without
giving effect to the Sterling Issuance):
120,000,000 = "Y" x Average Closing Price.
Refinancing of Orion In connection with the consummation of the
Debt transaction, Actava/Orion will refinance
Orion's senior bank debt, its senior debt to
Sony Pictures Entertainment Inc. and its
subordinated debt issued to holders of
claims in its plan of reorganization.
Orion's majority shareholder and its
affiliate will be released from their
guarantee of Orion's senior debt.
Management of A three person Office of the Chairman of
Actava/Orion Actava/Orion will be established to manage
Actava/Orion. Orion's existing Chairman
will serve as the Chairman of Actava/Orion,
Orion's existing Vice Chairman will serve as
Vice Chairman of Actava/Orion and Actava's
President will serve as President of Actava/
Orion.
Bridge Facility Actava will, as promptly as practicable
following the execution and delivery of this
letter of intent, provide a $55 million
bridge loan facility to Orion, Metromedia
International Telcell, Inc. and MCEG
Sterling Incorporated for their respective
capital needs prior to the consummation of
the transactions.
<PAGE>
Exhibit B
THE ACTAVA GROUP INC.
4900 Georgia-Pacific Center
Atlanta, Georgia 30303
August 31, 1994
Metromedia International, Inc.
41 West Putnam Avenue
Greenwich, Connecticut 06830
International Telcell, Inc.
41 West Putnam Avenue
Greenwich, Connecticut 06830
Gentlemen:
This letter sets forth our understanding with respect to a
contemplated transaction (the "Proposed Transaction") between The Actava
Group Inc., a Delaware corporation ("Actava"), and Metromedia
International, Inc., a Delaware corporation ("MII"), and International
Telcell, Inc., a Delaware corporation ("ITI") which are in the process
of finalizing a combination of their business operations through the
creation of a newly formed Delaware holding company, Metromedia
International Telecommunications, Inc. ("MITI") (the "Exchange").
1. The Proposed Transaction. The Proposed Transaction
will have the principal terms set forth on Exhibit A hereto.
2. Conditions. Consummation of the Proposed Transaction
is subject to the following conditions: (i) execution and delivery of
definitive agreements providing for the Proposed Transaction containing
representations, warranties, covenants and closing conditions which are
mutually acceptable to the parties hereto, (ii) satisfaction by the
parties hereto with the results of their respective legal and financial
due diligence of one another, (iii) approval of the Proposed Transaction
by the Board of Directors and the shareholders of MITI and Actava,
(iv) consummation of (a) the proposed transaction between Actava and
Orion Pictures Corporation which is the subject of the letter dated as
of the date hereof between Actava and Orion Pictures Corporation, a copy
of which is attached as Exhibit B, and (b) the proposed transaction
among Orion Pictures Corporation, MCEG Sterling Incorporated and Actava
which is the subject of the letter dated as of the date hereof among
Actava, Orion Pictures Corporation and MCEG Sterling Incorporated, a
copy of which is attached as Exhibit C, and (v) receipt of all requisite
<PAGE>
regulatory approvals, including approval with respect to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
3. Press Release. Promptly after the execution and
delivery of this letter by the parties hereto, Actava and Metromedia
Company shall issue a press release in a form agreed upon by such
parties. Thereafter, except as may be required by applicable law or
pursuant to the rules and regulations of the New York Stock Exchange,
Inc., none of the parties hereto shall, and shall cause their respective
affiliates and representatives not to, issue or cause the publication of
any press release or other announcement with respect to the Proposed
Transaction without the consent of the other parties hereto.
4. Expenses. Each of the parties hereto agrees that if
the Proposed Transaction is consummated, Actava will pay the fees and
expenses of the parties hereto; provided, that, if the Proposed
Transaction is not consummated, each party will pay its own costs and
expenses incurred in connection with the transactions contemplated by
this letter.
5. Governing Law. This letter shall be governed by the
laws of the State of New York without regard to the conflict of laws
principles thereof.
6. Non-Binding Letter. This letter merely constitutes
our current understanding of the Proposed Transaction but, except as set
forth in the last sentence of this paragraph, shall not be binding upon
the parties, nor shall it impose any obligations on the parties. Except
as set forth in the last sentence of this paragraph, no binding
obligation with respect to the Proposed Transaction will result unless
the definitive agreements are executed and delivered by the parties.
Notwithstanding the foregoing, paragraphs 3, 4 and 5 above and this
paragraph shall constitute the legal, valid and binding obligation of
the parties.
<PAGE>
If this letter correctly sets forth our understanding,
please so acknowledge by signing in the space indicated below and
returning the enclosed copy of this letter.
Very truly yours,
THE ACTAVA GROUP INC.
By: /s/ John D. Phillips
----------------------------
Name: John D. Phillips
Title: President & CEO
ACCEPTED AND AGREED:
METROMEDIA INTERNATIONAL, INC.
By: /s/ Carl C. Brazell, Jr.
-----------------------------
Name: Carl C. Brazell, Jr.
Title: President
INTERNATIONAL TELCELL, INC.
By: /s/ William B. Manning
-----------------------------
Name: William B. Manning
Title: Sr. V.P. & CFO
<PAGE>
Exhibit A
Business Combination with The Actava Group, Inc. ("Actava") and upon
MITI the consummation of the Exchange,
Metromedia International
Telecommunications, Inc. ("MITI") will
enter into a business combination as
follows:
(a) Each of Metromedia Company's and
its affiliates' shares of MITI common
stock will be exchanged for 5.5614 1/
shares (subject to adjustment as described
in paragraph (c) below) of newly-issued
Class A common stock of Actava, which
Class A common stock will have the same
terms and conditions as Actava's existing
common stock except that it will be
entitled to 3 votes per share on all
matters voted upon by Actava's
shareholders.
(b) Simultaneously, each of the
remaining shares of MITI common stock will
be exchanged for 5.5614 shares (subject to
adjustment as described in paragraph (c)
below) of newly-issued Actava common stock
registered under the Securities Act of
1933, as amended entitled to one vote per
share on all matters voted upon by
Actava's shareholders.
(c) The number of shares of (i) Actava
Class A common stock which Metromedia
Company and its affiliates will receive in
the transaction for each share of MITI
common stock, and (ii) Actava common stock
which MITI's remaining shareholders will
receive for each share of MITI common
- - ----------------------------------------------------------------------
1/ Based upon 1,712,484 shares of MITI common stock
outstanding and subject to adjustment in the event of
the issuance and exercise of certain employee stock
options, stock awards and stock grants entitling the
holders thereof to acquire shares of common stock of
MITI.
<PAGE>
stock will, in each such case be adjusted
if on the business day prior to the
closing date of the transaction, the
average of the closing price of Actava
common stock on the New York Stock
Exchange, Inc. for the 20 most recent
trading days prior to such date (the
"Average Closing Price") is determined to
be less than $10.50 per share, by solving
for "Y" in the following formula and
dividing "Y" by the number of shares of
MITI common stock outstanding on such
date:
100,000,000 = "Y" x Average Closing Price.
Bridge Facility Actava will, as promptly as practicable
following the execution and delivery of
this letter of intent, provide a
$55 million bridge loan facility to Orion
Pictures Corporation, MITI and MCEG
Sterling Incorporated for their respective
capital needs prior to the consummation of
the transactions.
<PAGE>
Exhibit C
ORION PICTURES CORPORATION
1888 Century Park East
Los Angeles, California 90067
August 31, 1994
MCEG Sterling Incorporated
1888 Century Park East, Suite 1777
Los Angeles, California 90067
The Actava Group, Inc.
4900 Georgia-Pacific Center
Atlanta, Georgia 30303
Gentlemen:
This letter sets forth our understanding with respect to a
contemplated transaction (the "Proposed Transaction") among Orion
Pictures Corporation, a Delaware corporation ("Orion"), MCEG Sterling
Incorporated, a Delaware corporation ("Sterling"), and The Actava Group,
Inc. a Delaware corporation ("Actava").
1. The Proposed Transaction. The Proposed Transaction will
have the principal terms set forth on Exhibit A hereto.
2. Conditions. Consummation of the Proposed Transaction is
subject to the following conditions: (i) execution and delivery of
definitive agreements providing for the Proposed Transaction containing
representations, warranties, covenants and closing conditions which are
mutually acceptable to the parties hereto, (ii) approval of the Proposed
Transaction by the Board of Directors and stockholders of Orion,
Sterling and Actava, (iii) satisfaction by Orion of its legal and
financial due diligence review of Sterling, (iv) satisfaction by
Sterling of its legal and financial due diligence review of Orion and
Actava, (v) consummation of (a) the proposed transaction between Actava
and Orion which is the subject of the letter dated as of the date hereof
between Actava and Orion, a copy of which is attached as Exhibit B and
(b) the proposed transaction between Actava and Metromedia International
Telecommunications, Inc., which is the subject of the letter dated as of
the date hereof between Actava and Metromedia International, Inc., and
International Telcell, Inc., a copy of which is attached hereto as
Exhibit C hereto and (vi) receipt of all requisite regulatory approvals,
including approval with respect to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
3. Press Release. Promptly after the execution and delivery of
this letter by the parties hereto, Actava and Metromedia Company shall
issue a joint press release agreed upon by such parties. Thereafter,
<PAGE>
except as may be required by applicable law or pursuant to the rules and
regulations of the National Association of Securities Dealers Automated
Quotation System, neither Orion nor Sterling shall, and shall cause
their respective affiliates and representatives not to, issue or cause
the publication of any press release or other announcement with respect
to the Proposed Transaction without the consent of the other party
hereto.
4. Expenses. Each of the parties hereto agrees that if the
Proposed Transaction is consummated, Actava will pay the fees and
expenses of the parties hereto; provided, that, if the Proposed
Transaction is not consummated, each party will pay its own costs and
expenses incurred in connection with the Proposed Transaction.
5. Governing Law. This letter shall be governed by the laws of
the State of New York without regard to the conflict of laws principles
thereof.
6. Non-Binding Letter. This letter merely constitutes our
current understanding of the Proposed Transaction but, except as set
forth in the last sentence of this paragraph, shall not be binding upon
the parties, nor shall it impose any obligations on the parties. Except
as set forth in the last sentence of this paragraph, no binding
obligation with respect to the Proposed Transaction will result unless
the definitive agreements are executed and delivered by the parties.
Notwithstanding the foregoing, paragraphs 3, 4 and 5 above and this
paragraph shall constitute the legal, valid and binding obligation of
the parties.
If this letter correctly sets forth our understanding, please so
acknowledge by signing in the space indicated below and returning the
enclosed copy of this letter.
Very truly yours,
ORION PICTURES CORPORATION
By: /s/ John W. Hester
------------------------------------
Name: John W. Hester
Title: Executive Vice President
& General Counsel
ACCEPTED AND AGREED:
MCEG STERLING INCORPORATED
By: /s/ John Hyde
-------------------------
Name: John Hyde
Title: President, CEO
THE ACTAVA GROUP INC., as to Paragraph 4 only
<PAGE>
By: /s/ John D. Phillips
--------------------------
Name: John D. Phillips
Title: President & CEO
<PAGE>
Exhibit A
Acquisition of Sterling MCEG Sterling Incorporated ("Sterling")
Common Stock and Orion Pictures Corporation ("Orion")
will enter in an agreement which will
ultimately provide for an exchange by
Sterling's stockholders of their shares
for shares of The Actava Group, Inc.
("Actava") as described below. It is the
parties intention to effect the exchange
of Sterling stock for Actava stock
pursuant to one or more "reorganizations"
within the meaning of Section 368 of the
Internal Revenue Code of 1986, as amended.
Initially, the outstanding shares of
common stock of Sterling will be exchanged
for 1,000,000 shares of Orion common
stock.
Minimum Consideration Immediately following the acquisition of
Sterling by Orion, Orion will be acquired
by Actava (the "Orion Acquisition") and
Orion agrees that in connection with the
Orion Acquisition, Sterling's former
stockholders, as stockholders of Orion,
will receive Actava common stock
registered under the Securities Act of
1933, as amended, with an aggregate value
determined on the closing date of the
transaction of not less than $6.0 million
(the "Minimum Value"). If Sterling's
former stockholders are to receive Actava
common stock with a value less than the
Minimum Value, Orion will provide the
former Sterling stockholders pro rata with
an additional amount of cash or Orion
common stock (at Orion's option)
sufficient for the former Sterling
stockholders to receive Actava common
stock equal to the Minimum Value.
<PAGE>
Maximum Consideration Sterling agrees that the shares of Actava
stock its former stockholders receive in
the Orion Acquisition shall not have an
aggregate value determined on the closing
date of the transaction of more than $8.5
million. If Sterling's stockholders are
to receive Actava common stock with an
aggregate value determined on the closing
date of the transaction of more than $8.5
million, the aggregate number of common
shares issued to Sterling's former
stockholders in the acquisition shall be
adjusted such that the Actava shares to be
received by Sterling's former stockholders
in the Orion Acquisition will have an
aggregate value of not more than $8.5
million.
