<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) APRIL 12, 1995
THE ACTAVA GROUP INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 1-5706 58-0971455
- ------------------------------- ------------------------ --------------------
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
4900 GEORGIA-PACIFIC CENTER, ATLANTA, GEORGIA 30303
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: 404/658-9000
================================================================================
<PAGE> 2
ITEM 1. Changes in Control of Registrant
On April 12, 1995, The Actava Group Inc. ("Actava"), Orion Pictures
Corporation ("Orion"), MCEG Sterling Incorporated ("Sterling"), and Metromedia
International Telecommunications, Inc. ("MITI") entered into an Agreement and
Plan of Merger (the "Merger Agreement") providing for the merger of each of
Orion, Sterling and MITI into and with Actava (the "Mergers"). If the Mergers
are consummated, Actava will be renamed "Metromedia International Group, Inc."
On April 12, 1995, Actava also entered into a Share Exchange Agreement (the
"Share Exchange Agreement") with Metromedia Company ("Metromedia") and certain
of its affiliates (together with Metromedia, the "Exchanging Holders"). The
Exchanging Holders are the principal stockholders of both Orion and MITI. The
Merger Agreement and the Share Exchange Agreement were approved by the Board of
Directors of Actava at a meeting held on April 12, 1995.
Upon consummation of the Mergers, all of the outstanding shares of the
$.25 par value common stock of Orion ("Orion Common Stock"), the $.001 par
value common stock of Sterling ("Sterling Common Stock"), and the $.001 par
value common stock of MITI ("MITI Common Stock") will be converted into shares
of the $1.00 par value common stock of Actava ("Common Stock") pursuant to
formulas contained in the Merger Agreement. Under such formulas, the number of
shares of Common Stock to be issued in connection with the Mergers will be
based on the average of the last sales prices for the Common Stock as reported
on the New York Stock Exchange for the last twenty consecutive trading days
ending on the business day immediately prior to the date on which the Mergers
are consummated (the "Average Closing Price"). The Merger Agreement provides
that it is a condition precedent to the obligation of Actava to
<PAGE> 3
consummate the Mergers that the Average Closing Price shall not be less than
$8.25. If the Mergers had been consummated on March 31, 1995, holders of Orion
Common Stock would have received .60606 shares of Common Stock for each share
of Orion Common Stock (resulting in the issuance of approximately 12,200,000
shares of Common Stock to the holders of Orion Common Stock), holders of MITI
Common Stock would have received 5.88569 shares of Common Stock for each share
of MITI Common Stock (resulting in the issuance of approximately 10,200,000
shares of Common Stock to the holders of MITI Common Stock), and holders of
Sterling Common Stock would have received .05404 shares of Common Stock for
each share of Sterling Common Stock (resulting in the issuance of approximately
610,000 shares of Common Stock to the holders of Sterling Common Stock). As of
March 31, 1995, there were 17,327,158 shares of Common Stock outstanding. If
the Mergers had been consummated on March 31, 1995, Actava would have issued
approximately 23,001,000 additional shares of Common Stock in connection with
the Mergers.
Under the Share Exchange Agreement, Actava and the Exchanging Holders
have agreed that the Exchanging Holders, immediately following the consummation
of the Mergers, will exchange all of their shares of Common Stock received in
the Mergers (such exchange is hereinafter referred to as the "Share Exchange")
in return for the same number of shares of a newly authorized series of Class A
Common Stock. Shares of Class A Common Stock will be identical to shares of
Common Stock except that such shares (i) will be entitled to three votes per
share on all matters (other than the election of directors) to be voted upon by
Actava's stockholders, (ii) will be entitled to vote as a separate class to
elect six of the ten members of
2
<PAGE> 4
Actava's Board of Directors, and (ii) will be convertible at any time at the
option of the holders thereof into an equal number of shares of Common Stock.
Accordingly, upon consummation of the Share Exchange, the Exchanging Holders
will be entitled to elect six of the ten members of Actava's Board of Directors
and will own approximately 31.0% (assuming that the Mergers had been
consummated on March 31, 1995) of the fully diluted common equity of Actava and
will collectively be entitled to approximately 57.4% (assuming that the Mergers
had been consummated on March 31, 1995) of the fully diluted voting power of
Actava. As a result, the Share Exchange Agreement is an arrangement that may
result in a change of control of Actava.
The Merger Agreement provides that the Mergers are subject to the
satisfaction or waiver of certain conditions precedent, including (i) the
receipt of the requisite approval of the Mergers by the Board of Directors of
Orion on or prior to June 30, 1995; (ii) the receipt of the requisite approval
of the Mergers and the Share Exchange by the stockholders of Actava and the
receipt of the requisite approval of the Mergers by the stockholders of Orion,
Sterling and MITI; (iii) the receipt of certain fairness opinions from the
financial advisors of each of the parties to the Mergers; (iv) that the Average
Closing Price not be less than $8.25; (v) that the shares of Common Stock have
been accepted for listing on the New York Stock Exchange or the American Stock
Exchange, Inc. or accepted for quotation on the Nasdaq National Market of the
National Association of Securities Dealers, Inc.; (vi) the receipt of written
opinions of counsel with respect to certain legal matters and the tax-free
nature of the Mergers; (vii) the refinancing, repayment or conversion to equity
of certain indebtedness of Orion on terms specified in a schedule to the Merger
Agreement or on other terms and conditions reasonably satisfactory to
3
<PAGE> 5
the Executive Committee of Actava's Board of Directors and on terms reasonably
satisfactory to Orion; (viii) the refinancing or repayment of certain specified
indebtedness of Orion, MITI and Sterling to Metromedia and its affiliates; (ix)
that no material adverse change in the business, assets, prospects, condition
or results of operations of Actava, Orion, MITI or Sterling shall have occurred
since the date of the Merger Agreement; (x) the receipt of all material
consents or approvals of third parties required in connection with the Mergers;
and (xi) the completion by Actava, on or before May 14, 1995, of its business,
legal, financial and accounting due diligence review of MITI. Any of the
conditions to the Mergers, other than the required stockholder approvals and
the approval by the Board of Directors of Orion, may be waived by the parties
whom the conditions are intended to benefit.
The Merger Agreement may be terminated at any time prior to
consummation of the Mergers (i) by the mutual written consent of the parties,
(ii) unilaterally by any party if the Mergers have not been consummated on or
before December 31, 1995, or (iii) by the non-breaching party in the case of
certain material breaches by the other party.
It is currently anticipated that a three person Office of the Chairman
will be created to manage the business and affairs of Actava (to be renamed
Metromedia International Group, Inc.) following the consummation of the
Mergers. The Office of the Chairman will consist of the following persons:
John W. Kluge, the current Chairman of the Board of Orion and MITI, as Chairman
of the Board; Stuart Subotnick, the current Vice Chairman of Orion and MITI, as
Vice
4
<PAGE> 6
Chairman; and John D. Phillips, the current President and Chief Executive
Officer of Actava, as President and Chief Executive Officer.
Letters of intent relating to the Mergers were executed and announced
on August 31, 1994. The letters of intent contemplated that Actava would
provide up to $55 million of interim financing on a secured basis to Orion,
Sterling and MITI prior to the consummation of the Mergers. Pursuant to the
letters of intent, Actava and Metromedia entered into a Credit Agreement dated
as of October 11, 1994 (the "Credit Agreement") under which Actava agreed to
make loans to Metromedia in an amount not to exceed an aggregate of $55
million. Under the terms of the Credit Agreement, Metromedia agreed to use the
proceeds of the loans to make advances or to pay obligations on behalf of
Orion, Sterling and MITI. All loans made by Actava to Metromedia under the
Credit Agreement are secured by shares of stock of Orion and MITI owned by
Metromedia and its affiliates. In addition, John W. Kluge, a general partner
of Metromedia, has personally guaranteed the loans. The Credit Agreement
provides that interest will be due on the principal amount of all loans at an
annual rate equal to the prime rate announced from time to time by Chemical
Bank (9% as of March 31, 1995). Interest will be increased to prime plus three
percent per annum if a party other than Actava terminates discussions relating
to the Mergers. Loans totaling $49.8 million had been made by Actava to
Metromedia under the Credit Agreement as of April 12, 1995. The Credit
Agreement provided that all loans would be due and payable on April 12, 1995.
On April 12, 1995, the Board of Directors agreed to extend the maturity date of
the loans until the earlier of (i) the date of consummation of the Mergers,
(ii) three months following the abandonment or termination of
5
<PAGE> 7
the Merger Agreement by any party thereto pursuant to Article 14 thereof, or
(iii) December 31, 1995. Actava and Metromedia have entered into Amendment No.
1 to the Credit Agreement dated as of April 12, 1995 in order to reflect the
extended maturity date of the loans made pursuant to the Credit Agreement.
Triton Group, Ltd. ("Triton") currently owns approximately 25.5% of
the issued and outstanding shares of Actava's Common Stock. On February 15,
1995, Triton filed with the Securities and Exchange Commission an amendment to
its report on Schedule 13D relating to its ownership of Actava's Common Stock
(the "Schedule 13D Amendment"). In the Schedule 13D Amendment, Triton
indicated that it opposed the Mergers and encouraged Actava's Board of
Directors and management to evaluate other alternative business strategies and
to exercise their obligations diligently under Delaware law relating to the
sale of Actava.
On March 24, 1995, TAC, Inc., a Delaware corporation ("TAC"), filed
with the Securities and Exchange Commission a Schedule 14D-1 Tender Offer
Statement (the "Schedule 14D-1") and commenced a tender offer (the "Offer") to
purchase for $1.80, net, in cash all outstanding shares of common stock
(including the associated common stock purchase rights) of Triton. On April
24, 1995, TAC announced that it had raised the consideration being offered for
all of the outstanding shares of Triton to $2.02 per share and that it was
extending the Offer at the revised price until May 5, 1995. TAC is a company
newly formed in order to commence the Offer by Mr. Phillips and Met Tac Inc., a
company owned by Mr. Kluge, as trustee, and Mr. Subotnick. Consummation of the
Offer is subject to a number of conditions, but it is not
6
<PAGE> 8
subject either to obtaining financing or to the consummation of the Mergers.
The purpose of the Offer is to acquire control of, and the entire equity
interest in, Triton. Upon consummation of the Offer, TAC has stated it will
cause the shares of Actava's Common Stock owned by Triton to be voted in favor
of the Mergers. In addition, TAC has stated that it intends to have Triton
consummate a merger or other business combination with TAC or an affiliate of
TAC as soon as practicable following the consummation of the Offer.
TAC requested the Board of Directors of Actava to approve, pursuant to
Section 203(a)(1) of the Delaware General Corporation Law, the purchase by TAC,
directly or indirectly, of the shares of Actava's Common Stock held by Triton.
On April 12, 1995, the Board of Directors of Actava approved such purchase
after being advised that TAC had agreed that any "business combination" (as
defined in Section 203 of the Delaware General Corporation Law) between Actava
and TAC or Triton following any such purchase must be approved by a majority of
the directors of Actava who are "disinterested" from TAC or any affiliate of
TAC (except Actava).
7
<PAGE> 9
ITEM 7. Financial Statements and Exhibits
(c) Exhibits
<TABLE>
<CAPTION>
Document with which Designation of
Exhibit Exhibit was previously such Exhibit in
Number Description filed with Commission that Document
- ------ ------------------------------------ --------------------- -------------
<S> <C> <C> <C>
99(a) Agreement and Plan of Merger dated Current Report On Form 99(a)
as of April 12, 1995 by and among 8-K for event occurring
The Actava Group Inc., Orion on April 12, 1995
Pictures Corporation, MCEG Sterling
Incorporated, and Metromedia
International Telecommunications, Inc.
99(b) Share Exchange Agreement dated as Current Report On Form 99(b)
of April 12, 1995 by and between The 8-K for event occurring
Actava Group Inc. and the Exchanging on April 12, 1995
Holders named therein.
99(c) Amendment No. 1 dated as of April
12, 1995 to the Credit Agreement dated
as of October 11, 1994 between The
Actava Group Inc. and Metromedia
Company.
</TABLE>
8
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this Amendment No. 1 to Form 8-K filed on
April 14, 1995 to be signed on its behalf by the undersigned hereunto duly
authorized.
THE ACTAVA GROUP INC.
-----------------------------------
Registrant
/s/ Frederick B. Beilstein, III
-----------------------------------
Frederick B. Beilstein, III
Senior Vice President and
Chief Financial Officer
Dated: April 28, 1995
9
<PAGE> 11
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- ---------------------------------------------------------------------------
<S> <C>
99(c) Amendment No. 1 dated as of April 12, 1995 to the Credit Agreement dated as
of October 11, 1994 between The Actava Group Inc. and Metromedia Company.
</TABLE>
10
<PAGE> 1
EXHIBIT 99(c)
AMENDMENT NO. 1, dated as of April 12, 1995 (this "Amendment"), to
the Credit Agreement dated as of October 11, 1994 (the "Credit Agreement"),
between The Actava Group Inc., a Delaware corporation (the "Lender"), and
Metromedia Company, a Delaware general partnership (the "Borrower").
The Borrower has requested that the Lender amend certain provisions
of the Credit Agreement. Each party is willing, on the terms, subject to the
conditions and to the extent set forth below, to enter into such an amendment.
In consideration of the premises and the agreements, provisions and
covenants herein contained, the parties hereby agree, on the terms and subject
to the conditions set forth herein, as follows:
SECTION 1. Amendment of the Credit Agreement. Section 1.1 of
the Credit Agreement is hereby amended as follows:
(a) The definition of "Actava Termination Event" is hereby amended
and restated in its entirety to read as follows:
"Actava Termination Event: the abandonment or termination of
the Merger Agreement by any party thereto pursuant to Article 14 thereof."
(b) The definition of "Business Combination" is hereby amended and
restated in its entirety to read as follows:
"Business Combination: the mergers, pursuant to the Merger
Agreement, of each of Orion, MITI and Sterling with and into Actava, with
Actava being the surviving corporation of each of such mergers."
<PAGE> 2
(c) The following definition of "Merger Agreement" is hereby
inserted after the definition of "Material Adverse Effect" and before the
definition of "MITI":
"Merger Agreement: the Agreement and Plan of Merger dated as
of April 12, 1995 among Actava, Orion, Sterling and MITI."
(d) The definition of "Orion/MITI Termination Event" is hereby
amended and restated in its entirety to read as follows:
"Orion/MITI Termination Event: the abandonment or termination
of the Merger Agreement by Orion or MITI pursuant to Article 14 thereof."
(e) The definition of "Termination Date" is hereby amended and
restated in its entirety to read as follows:
"Termination Date: the earlier of (x) December 31, 1995, (y)
the date which is three months following the date of an Actava Termination
Event or (z) the consummation of the Business Combination."
SECTION 2. Representations and Warranties. The Borrower
represents and warrants to the Lender that:
(a) This Amendment has been duly and validly authorized, executed
and delivered by it and constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and by general equity principles
(regardless of whether such enforceability is considered in a proceeding at law
or in equity).
(b) Before and after giving effect to this Amendment, the
representations and warranties set forth in Section 3 of the Credit Agreement
are true and correct in all material
2
<PAGE> 3
respects with the same effect as if made on the date hereof (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as if made on such date).
(c) Before and after giving effect to this Amendment, no Event of
Default or Default has occurred and is continuing.
(d) It shall be an Event of Default for all purposes of the Credit
Agreement as amended hereby, if any representation, warranty or certification
made by the Borrower in this Amendment, or in any certificate, document or
financial or other statement furnished by it at any time under or in connection
with this Amendment shall prove to have been incorrect in any material respect
on or as of the date made or deemed made.
SECTION 3. Credit Agreement. Except as specifically amended
hereby, the Credit Agreement shall continue in full force and effect in
accordance with the provisions thereof as in existence on the date hereof.
After the date hereof, any reference to the Credit Agreement shall mean the
Credit Agreement as amended hereby.
SECTION 4. Definitions. Capitalized terms used but not defined
herein shall have the respective meanings ascribed to such terms in the Credit
Agreement.
SECTION 5. Binding Effect. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
SECTION 6. Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
3
<PAGE> 4
SECTION 7. Counterparts. This Amendment may be executed in two
or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective authorized officers as of the day and year
first written above.
METROMEDIA COMPANY
/s/ Silvia Kessel
----------------------------------------------
Name: Silvia Kessel
Title: Senior Vice President
THE ACTAVA GROUP INC.
/s/ John D. Phillips
----------------------------------------------
Name: John D. Phillips
Title: President and Chief Executive Officer
4
