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): NOVEMBER 1, 1995
METROMEDIA INTERNATIONAL GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-5706 58-0971455
(State or other jurisdiction (Commission File (IRS Employer Identification
of incorporation) Number) Number)
945 East Paces Ferry Road
Suite 2210
Atlanta, Georgia 30326
(Address of principal executive offices)
Registrant's telephone number, including area code: (404) 261-6190
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Item 1. CHANGES IN CONTROL OF REGISTRANT
On November 1, 1995, the Registrant, Orion Pictures Corporation
("Orion"), Metromedia International Telecommunications, Inc. ("MITI"),
MCEG Sterling Incorporated ("Sterling"), OPC Merger Corp. ("OPC
Mergerco") and MITI Merger Corp. ("MITI Mergerco") consummated the
Mergers (as defined below) contemplated by the previously announced
Amended and Restated Agreement and Plan of Merger (the "Merger
Agreement") dated as of September 27, 1995 among the Registrant, Orion,
MITI, Sterling, OPC Mergerco and MITI Mergerco. The Merger Agreement
provided for, among other things, the simultaneous mergers (the
"Mergers") of each of Orion and MITI with and into the Registrant's
recently-formed subsidiaries, OPC Mergerco and MITI Mergerco,
respectively, and the merger of Sterling with and into the Registrant.
In connection with the Mergers, the Registrant changed its name from The
Actava Group Inc. to Metromedia International Group, Inc.
Upon consummation of the Mergers, all of the outstanding shares
of the Common Stock, par value $.25 per share of Orion (the "Orion Common
Stock"), the Common Stock, par value $.001 per share, of MITI (the "MITI
Common Stock") and the Common Stock, par value $.001 per share, of
Sterling (the "Sterling Common Stock") were converted into shares of the
Common Stock, par value $1.00 per share, of the Registrant ("Common
Stock") pursuant to formulas contained in the Merger Agreement. Pursuant
to such formulas, holders of Orion Common Stock received .57143 shares of
Common Stock for each share of Orion Common Stock (resulting in the
issuance of approximately 11,428,600 shares of Common Stock to the
holders of Orion Common Stock), holders of MITI Common Stock received
5.54937 shares of Common Stock for each share of MITI Common Stock
(resulting in the issuance of approximately 9,523,817 shares of Common
Stock to the holders of MITI Common Stock) and holders of Sterling Common
Stock received .04309 shares of Common Stock for each share of Sterling
Common Stock (resulting in the issuance of approximately 483,254 shares
of Common Stock to the holders of Sterling Common Stock). In addition,
pursuant to the terms of the Contribution Agreement dated as of
November 1, 1995 among the Registrant and two affiliates of Metromedia
Company, MetProductions, Inc. ("MetProductions") and Met International,
Inc. ("Met International"), MetProductions and Met International
contributed to the Registrant an aggregate of approximately $37,068,303
principal amount of indebtedness of Orion and its affiliate and an
affiliate of MITI owed to MetProductions and Met International,
respectively, in exchange for an aggregate of approximately 3,530,314
shares of Common Stock.
Immediately prior to the consummation of the Mergers, there
were approximately 17,490,901 shares of Common Stock outstanding. As a
result of the consummation of the Mergers and the transactions
contemplated by the Contribution Agreement, the Registrant issued an
aggregate of approximately 24,965,985 shares of Common Stock. Following
consummation of the Mergers and the transactions contemplated by the
Contribution Agreement, Metromedia Company and its affiliates
(collectively, the "Metromedia Holders") collectively received an
aggregate of approximately 15,252,128 shares of Common Stock (or
approximately 35.9% of the issued and outstanding shares of Common
Stock).
A three person Office of the Chairman was created to manage the
business and affairs of the Registrant following consummation of the
Mergers. The Office of the Chairman consists of the following persons:
John W. Kluge, the Chairman of the Board of Orion and MITI prior to the
Mergers, as Chairman of the Board of the Registrant; Stuart Subotnick,
the Vice Chairman of Orion and MITI prior to the Mergers, as Vice
Chairman of the Registrant; and John D. Phillips, the President and Chief
Executive Officer of the Registrant prior to the Mergers, as President
and Chief Executive Officer of the Registrant.
In addition, pursuant to the terms of the Merger Agreement, the
Metromedia Holders, through their control of Orion, appointed six of ten
members of the Registrant's initial Board of Directors. The Directors
appointed by the Metromedia Holders are John W. Kluge, Stuart Subotnick,
Silvia Kessel, Richard J. Sherwin, Arnold L. Wadler and Leonard White.
Pursuant to the terms of the Merger Agreement, the remaining four members
of the Registrant's initial Board of Directors, John D. Phillips, John P.
Imlay,Jr., Clark A. Johnson and Carl E. Sanders, were appointed by the
Board of Directors of the Registrant prior to the Mergers. The Board of
Directors of the Registrant is divided into three classes. One class of
directors was initially elected for a term expiring at the annual meeting
of stockholders of the Registrant to be held in 1996 (the "Class I
Directors"), a second class of directors was initially elected for a term
expiring at the annual meeting of stockholders of the Registrant to be
held in 1997 (the "Class II Directors"), and a third class of directors
was initially elected for a term expiring at the annual meeting of
stockholders of the Registrant to be held in 1998 (the "Class III
Directors"). Members of each class will hold office until their
successors are elected and qualified. At each succeeding annual meeting
of the stockholders of the Registrant, the successors of the class of
directors whose term expires at that meeting shall be elected by a
plurality vote of all votes cast at such meeting and will hold office for
a three-year term. The Class I Directors of the Registrant are John W.
Kluge, Stuart Subotnick and John P. Imlay, Jr. The Class II Directors of
the Registrant are John D. Phillips, Richard J. Sherwin and Leonard
White. The Class III Directors of the Registrant are Clark A. Johnson,
Silvia Kessel, Carl E. Sanders and Arnold L. Wadler.
In connection with the Mergers, the Common Stock was delisted
from the New York Stock Exchange and is now listed on the American Stock
Exchange, trading under the ticker symbol "MMG."
The Metromedia Holders had the right to appoint a majority of
the members of the initial Board of Directors of the Registrant as a
result of their majority ownership of the Orion Common Stock and their
control, with a member of Orion's management, of the Board of Directors
of Orion. In addition, the Metromedia Holders are now the Registrant's
single largest stockholder. Accordingly, the Metromedia Holders
currently control the direction and operations of the Registrant.
Due to the existence of common control of Orion and MITI prior
to consummation of the Mergers, their combination pursuant to the Mergers
will be accounted for as a combination of entities under common control.
As a result, the combination of Orion and MITI will be effected utilizing
historical costs for the ownership interests of the Metromedia Holders.
The remaining ownership interests of MITI other than those of the
Metromedia Holders will be accounted for in accordance with the purchase
method of accounting based on the fair value of such ownership interests,
as determined by the value of the shares received by the holders of such
interests at the effective time of the Mergers. For accounting purposes
only, Orion and MITI have been deemed to be the joint acquiror of the
Registrant and Sterling. The acquisition of the Registrant and Sterling
will be accounted for as a purchase. As a result of the reverse
acquisition, the historical financial statements of the Registrant for
periods prior to the Mergers will be those of Orion rather than the
Registrant.
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
See Item 1 for a description of the Mergers.
Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
On November 1, 1995, the Board of Directors of the Registrant
approved the engagement of KPMG Peat Marwick LLP ("KPMG") as its
independent auditors for the fiscal year ended December 31, 1995 to
replace Ernst & Young LLP ("Ernst & Young") who were dismissed as
auditors of the Registrant effective November 1, 1995.
In connection with the audits of the Registrant's financial
statements for the fiscal years ended December 31, 1994 and 1993, and in
the subsequent interim period, there did not exist any disagreements
between the Registrant and Ernst & Young on any matter of accounting
principles or practices, financial statement disclosure, or auditing
scope or procedure which, if not resolved to the satisfaction of Ernst &
Young, would have caused Ernst & Young to have referred to the subject
matter of disagreement in its report.
Prior to the engagement of KPMG, no member of that firm was
consulted by the Registrant (i) for the purpose of obtaining a written
report or oral advice with regard to the application of accounting
principles to a specified transaction of the Registrant, either completed
or proposed, (ii) regarding an inquiry as to the type of audit opinion
that may be rendered on the Registrant's financial statements or
(iii) regarding any matter that was the subject of a disagreement with
Ernst & Young or which constituted a reportable event pursuant to
Item 304(a)(1)(v) of Regulation S-K.
By letters dated November 6, 1995, copies of this Report on
Form 8-K were delivered to Ernst & Young and to KPMG for their comment.
Ernst & Young's response is attached hereto as Exhibit 16(a) to this
Report.
Item 7. Financial Statements, Pro Forma
FINANCIAL INFORMATION AND EXHIBITS
(a) The audited financial statements of Orion as of and for its
fiscal years ended February 28, 1995, 1994 and 1993 required by
this item, including the reports of independent auditors, the
audited Financial Statements of Sterling as of and for its
fiscal years ended March 31, 1995, 1994 and 1993 required by
this item, including the reports of independent auditors, the
unaudited Financial Statements of Sterling as of and for the
three months ended June 30, 1995 and 1994 required by this
item, the audited financial statements of MITI as of and for
its fiscal years ended December 31, 1994, 1993 and 1992
required by this item, including the reports of independent
auditors, and the unaudited Financial Statements of MITI as of
and for the six months ended June 30, 1995 and 1994 required by
this item are hereby incorporated by reference from the
Registrant's Registration Statement on Form S-4 (Registration
No.33-63003) declared effective by the Securities and Exchange
Commission on September 28, 1995. The unaudited financial
statements of Orion as of and for the six months ended
August 31, 1995 and 1994 required by this item are hereby
incorporated by reference from Orion Pictures Corporation's
Quarterly Report on Form 10-Q for the quarter ended August 31,
1995 (File No.1-5979).
(b) Pro Forma Financial Information of the Registrant required by
this item giving effect to the transactions described in Item 2
of this Report is hereby incorporated by reference from the
Registrant's Registration Statement on Form S-3 (Registration
No.33-63853) as filed with the Securities and Exchange
Commission on October 31, 1995.
(c) The following are exhibits to this Report and are filed
herewith:
Exhibit 16(a) Letter dated November 8, 1995, from Ernst &
Young LLP addressed to the Securities and
Exchange Commission stating its agreement
with the contents of this Current Report,
dated November 1, 1995.
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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.
METROMEDIA INTERNATIONAL GROUP, INC.
(Registrant)
By: /S/ ROBERT A. MARESCA
-------------------------------
Robert A. Maresca
Senior Vice President
Dated: November 8, 1995
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EXHIBIT INDEX
METROMEDIA INTERNATIONAL GROUP, INC.
Current Report on Form 8-K
Dated November 1, 1995
EXHIBIT NO. DESCRIPTION
16(a) Letter dated November 8, 1995, from Ernst &
Young LLP addressed to the Securities and
Exchange Commission stating its agreement
with the contents of this Current Report,
dated November 1, 1995.
EXHIBIT 16(a)
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[Letterhead of Ernst & Young LLP]
November 1, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Gentlemen:
We have read Item 4 of Form 8-K dated November 1, 1995, of
Metromedia International Group, Inc. and are in agreement with the
statements contained in the first and second paragraphs of Item 4
on page 7 therein. We have no basis to agree or disagree with
other statements of the registrant contained therein.
Very truly yours,
/s/ Ernst & Young LLP
