SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 30, 1996
Golden Books Family Entertainment, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-14399 06-1104930
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
850 Third Avenue, New York, New York 10022
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:(212) 753-8500
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5. Other Events.
On July 30, 1996, Golden Books Family Entertainment, Inc.
(the "Company") announced several related initiatives that support
its strategy to build a family entertainment company providing
content across multiple media.
The Company announced that it has entered into an
agreement with Hallmark Cards, Inc. ("Hallmark") providing for
Hallmark and the Company to enter into a strategic alliance, for
Hallmark to purchase $25 million of common stock of the Company and
for a possible additional investment by Hallmark in another $25
million of common stock of the Company.
The Company also announced that it has signed a
definitive agreement to acquire the family video library of Broadway
Video Entertainment, L.P. (BVE, L.P.) for $91 million: $81 million in
cash, and $10 million in common stock of the Company.
The Company also announced that it is seeking to raise
$100 million through the sale of convertible preferred securities to
be issued by a financing vehicle to be known as the Golden Books
Financing Trust, a Delaware business trust. The Trust will offer for
sale convertible preferred securities. These securities will have an
aggregate liquidation preference of $100 million and will be
convertible at the option of their holders into common stock of the
Company. The convertible preferred securities will not be registered
and have not been registered under the Securities Act of 1933, as
amended, and will be sold in the United States in a private placement
under Rule 144A and may not be offered or sold in the United States
absent registration or an applicable exemption from registration
requirements.
The Company also announced that, as part of management's
restructuring plan, the company has taken a number of strategic
actions and made decisions with respect to certain businesses and
assets. In addition, as part of a review of operations consistent
with the Company's restructuring plan and business strategy, the
Company expects to take primarily non-cash charges against its income
in fiscal 1997 beginning with approximately an $80 million charge in
the Company's second quarter financial statements in addition to the
$16 million charge previously announced to be recorded in the second
quarter.
The complete text of the three press release issued by
the Company are attached hereto as exhibits and are hereby
incorporated by reference in their entirety to this item.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
c. Exhibits
99.1 Press Release, dated July 30, 1996
99.2 Press Release, dated July 30, 1996
99.3 Press Release, dated July 30, 1996
<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.
GOLDEN BOOKS FAMILY ENTERTAINMENT, INC.
Dated: August 2, 1996 By: /s/ Tracey G. Riese
Tracey G. Riese
Senior Vice President
Golden Books Family Entertainment, Inc.
FOR IMMEDIATE RELEASE
CONTACT: Tracey Riese
Golden Books Family Entertainment, Inc.
(212) 583-6710
GOLDEN BOOKS FAMILY ENTERTAINMENT ANNOUNCES
STRATEGIC AND FINANCIAL INITIATIVES
Hallmark Cards Makes $25 Million Strategic Investment
Golden Books to Acquire Broadway Video Entertainment, L.P. for $91 Million
Offers Convertible Preferred Securities for $100 Million
Plans Restructuring
NEW YORK, July 30, 1996 -- Golden Books Family
Entertainment, Inc. (Nasdaq: GBFE) today announced several
related initiatives that support its strategy to build a family
entertainment company providing content across multiple media.
Richard E. Snyder, Chairman and CEO, stated, "Since we
assumed control of the company on May 8th, we have assembled a
new management team and have moved ahead simultaneously on many
fronts. The focus of our strategy is to revitalize and build
upon the core Golden Books business and to use the power of the
Golden Books brand to build a family entertainment company that
creates and exploits copyrights through multiple media. Today's
announcements mark our first steps in realizing that strategy."
The company today announced the following initiatives:
HALLMARK CARDS MAKES $25 MILLION STRATEGIC INVESTMENT
Golden Books has entered into an agreement with Hallmark
Cards, Inc. providing for Hallmark to purchase $25 million of
Golden Books common stock. This purchase is expected to be
completed in September. The two companies intend to develop
strategic relationships across appropriate lines of business,
including personal expression, family entertainment and personal
development products. In conjunction with developing that
strategic relationship, the two companies intend to agree to an
additional investment by Hallmark of $25 Million in Golden Books
common stock by the end of the year, on terms to be finalized.
(See joint release by Golden Books Family Entertainment, Inc. and
Hallmark, which follows).
GOLDEN BOOKS TO ACQUIRE BROADWAY VIDEO ENTERTAINMENT, L.P. FOR $91 MILLION
The company also announced that it has signed a definitive
agreement to acquire the family video library of Broadway Video
Entertainment, L.P. (BVE, L.P.) for $91 million: $81 million in
cash, and $10 million in Golden Books common stock. The
acquisition will form the foundation of a new business unit,
Golden Books Entertainment Group. The unit will focus on
expanding the Golden Books brand into family-related video,
television, film and multimedia, and on exploiting licensing and
merchandising opportunities. The acquisition is subject to the
completion of the offering described below, as well as other
conditions.
As part of the acquisition, Eric Ellenbogen, the President
of the general partner of BVE, L.P. family entertainment library,
will become President of the company's new Golden Books
Entertainment Group. Mr. Ellenbogen and Lorne Michaels, an
indirect owner of BVE, L.P., will join the Golden Books Board of
Directors. (See joint release by Golden Books Family
Entertainment, Inc. and Broadway Video, Inc., which follows).
OFFERS CONVERTIBLE PREFERRED SECURITIES FOR $100 MILLION
Golden Books also announced today that it is seeking to
raise $100 million through the sale of convertible preferred
securities to be issued by a financing vehicle to be known as the
Golden Books Financing Trust, a Delaware business trust. The
Trust will offer for sale convertible preferred securities. These
securities will have an aggregate liquidation preference of $100
million and will be convertible at the option of their holders
into Golden Books common stock.
The convertible preferred securities will not be registered
and have not been registered under the Securities Act of 1933, as
amended, and will be sold in the United States in a private
placement under Rule 144A and may not be offered or sold in the
United States absent registration or an applicable exemption from
registration requirements.
After completing the offering, and after using $81 million
to fund the cash portion of the purchase price of the company's
acquisition of BVE, L.P., Golden Books will have approximately
$115 million of cash. The remaining cash will be used to fund
the company's working capital and other operational needs, to
finance capital expenditures, for other general corporate
purposes and for potential future strategic acquisitions.
PLANS RESTRUCTURING
Golden Books also announced that, as part of management's
restructuring plan, the company has taken a number of strategic
actions and made decisions with respect to certain businesses and
assets. In addition, as part of a review of operations
consistent with the company's restructuring plan and business
strategy, the company expects to take primarily non-cash charges
against its income in fiscal 1997 beginning with the company's
second quarter financial statements. Accordingly, the company
will divest itself of its Penn Corporation (paper and party
goods) subsidiary, which will be classified as an asset held for
sale in the company's second quarter financial statements.
Also, the company expects to discontinue or replace certain
product lines and expeditiously liquidate the related inventory
and other slow-moving inventory. In addition, the company will
record charges associated with its plans to resolve outstanding
differences with its customers and licensors with a view to
improving relationships with them and with respect to the legal
matters. Based upon the determinations made to date, including
adjustments in the carrying value of assets held for sale, the
company will record charges of approximately $80 million in its
second quarter financial statements.
GOLDEN BOOKS FAMILY ENTERTAINMENT, INC., the largest
publisher of children's books in North America, creates,
publishes and markets an extensive range of children's
entertainment products, including story and picture books,
interactive electronic books and games, as well as coloring
books, activity books and other products for children and
families. The company's shares are traded on the Nasdaq Stock
Market under the symbol: GBFE.
# # #
FOR IMMEDIATE RELEASE
CONTACT: Tracey Riese
Golden Books Family Entertainment, Inc.
(212) 583-6710
Adrienne Lallo
Hallmark Cards, Inc.
816-274-5961
GOLDEN BOOKS FAMILY ENTERTAINMENT AND HALLMARK CARDS ANNOUNCE
STRATEGIC INVESTMENT AGREEMENT
HALLMARK WILL INVEST $25 MILLION IN GOLDEN BOOKS COMMON STOCK
________________________________________________
NEW YORK, JULY 30, 1996 -- Golden Books Family
Entertainment, Inc. (Nasdaq: GBFE) and Hallmark Cards, Inc.,
today announced that they have entered into an agreement
providing for Hallmark to purchase $25 million of the company's
common stock. That purchase is expected to be completed in
September. Hallmark and Golden Books intend to develop working
relationships across appropriate lines of business, including
personal expression, family entertainment and personal
development products. In conjunction with developing that
strategic relationship, the two companies intend to agree to an
additional investment by Hallmark of $25 Million in Golden Books
common stock by the end of the year, on terms to be finalized.
"Golden Books has priceless brand equity and awareness among
consumers who purchase products on behalf of children, and a
deeply talented new management team," said Irvine O. Hockaday,
Jr., president and chief executive officer of Hallmark Cards,
Inc. "Hallmark is pleased to be making an attractive investment
in a strong company that has many parallels to our own business.
In addition, we see a number of alliance possibilities that could
grow into a strategic partnership."
Richard E. Snyder, chairman and chief executive officer of
Golden Books Family Entertainment, Inc., stated, "This alliance
represents a significant step in Golden Books' transition into a
leading family entertainment company providing appealing and
educational content through multiple media. Hallmark and Golden
Books represent two of the strongest consumer brand franchises of
family products in the U.S. In addition to the benefits which
should accrue from the combined power of brand equity, our two
companies market complementary products to similar consumers. By
working together, we will work to leverage our proprietary and
licensed products through a broad range of formats and
distribution outlets."
Golden Books Family Entertainment, Inc., the largest
publisher of children's books in North America, creates,
publishes and markets an extensive range of children's
entertainment products, including story and picture books,
interactive electronic books and games, as well as coloring
books, activity books and other products for children and
families. The company's shares are traded on the Nasdaq Stock
Market under the symbol: GBFE.
Kansas City-based Hallmark Cards is known throughout the
world for its greeting cards, related personal expression
products and television's most honored and enduring dramatic
series, the "Hallmark Hall of Fame." Through licensing and joint
ventures, Hallmark continues to expand its product formats and
the way it distributes them. The privately held company serves
more than 45,000 retail outlets domestically, and Hallmark
products are available via on-line services, catalogs and
software retailers. The company publishes products in 20
languages and distributes them in more than 100 countries. It is
owner of Binney & Smith, and Hallmark Entertainment, Inc.
Worldwide sales in 1995 were $3.4 billion.
# # #
FOR IMMEDIATE RELEASE
CONTACT:
Tracey Riese Broadway Video, Inc.
Golden Books Family Entertainment, Inc. Sean Cassidy, Dan Klores Assoc.
(212) 583-6710 (212) 685-4300
GOLDEN BOOKS FAMILY ENTERTAINMENT, INC. AGREES TO ACQUIRE
THE FAMILY VIDEO LIBRARY OF BROADWAY VIDEO ENTERTAINMENT, L.P.
FOR $91 MILLION
FORMS NEW DIVISION FOCUSED ON FAMILY-RELATED VIDEO, TELEVISION
AND FILM
________________________________________________
NEW YORK, July 30, 1996 -- Golden Books Family
Entertainment, Inc. (Nasdaq: GBFE) today announced that it has
signed a definitive agreement to acquire all of the family
entertainment library assets of Broadway Video Entertainment,
L.P. (BVE, L.P.), a subsidiary of Broadway Video, Inc., for $91
million, $81 million in cash and $10 million in Golden Books
common stock. The acquisition will form the foundation of a new
business unit, Golden Books Entertainment Group. The unit will
focus on expanding the Golden Books brand into family-related
video, television, film and multimedia, and on exploiting
licensing and merchandising.
The library is comprised of copyrights and licenses to
characters, motion picture and television programs, both
animation and live action, and includes individual specials and
multiple episode series. Among the library titles are such well-
known properties as Rudolph the Red-Nosed Reindeer, Frosty the
Snowman, Santa Claus Is Coming to Town, Lassie, Felix the Cat,
The Lone Ranger and Underdog.
The acquisition is subject to a number of conditions,
including the completion of the offering of preferred securities
that was announced separately today. The acquisition is expected
to close by the end of October 1996.
As part of the acquisition, Eric Ellenbogen, the President
of the general partner of BVE, L.P., will become President of
Golden Books Entertainment Group. In addition, Lorne Michaels,
an indirect owner of BVE, L.P., and Mr. Ellenbogen will join the
Golden Books Board of Directors.
Richard E. Snyder, Chairman and Chief Executive Officer of
Golden Books Family Entertainment Inc., stated, "This important
acquisition is a cornerstone of our strategy to build a leading
family entertainment company that provides content through
multiple media. BVE's assets include some of the most
recognizable children's properties in the world. In addition,
Eric Ellenbogen will bring extraordinary expertise in the
acquisition, marketing, merchandising and cross-promotion of
children's entertainment. When combined with our strong family-
focused publishing capabilities, we have an outstanding
opportunity to build the value of a broad range of proprietary
copyrights and licensed product."
John Engleman, Chief Executive Officer of Broadway Video
said: "This transaction is good for both Broadway Video and
Golden Books. It is a strong strategic fit for Golden Books and
will enable our company to expand its core business activities."
Broadway Video Inc., under the direction of Chief Executive
Officer John Engelman, will continue to build its production,
post production and interactive divisions. In addition, Broadway
Video, Inc., which employs 200 people, will continue to pursue
the acquisition of related businesses.
SBC WARBURG, INC., a subsidiary of Swiss Bank Corporation,
acted as advisor to Golden Books on the Broadway Video
Entertainment acquisition.
BROADWAY VIDEO, INC. was founded in 1979 by Lorne Michaels,
an eight-time Emmy award winner and the creator and executive
producer of Saturday Night Live. The company's three divisions,
Broadway Video Entertainment, Broadway Video Facilities headed by
Peter Rudoy -- and Broadway Video Interactive are under the
direction of John Engelman and COO, Steve Shippee. Headquartered
in New York City, Broadway Video has offices in Los Angeles and
Toronto.
GOLDEN BOOKS FAMILY ENTERTAINMENT, INC., the largest
publisher of children's books in North America, creates,
publishes and markets an extensive range of children's
entertainment products, including story and picture books,
interactive electronic books and games, as well as coloring
books, activity books and other products for children and
families. The company's shares are traded on the Nasdaq Stock
Market under the symbol: GBFE.
# # #
