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PROSPECTUS
TELEMUNDO GROUP, INC.
994,231 Shares of Series A Common Stock
This Prospectus relates to 994,231 shares of Series A Common Stock, $.01 par
value per share (the "Series A Common Stock"), of Telemundo Group, Inc.
("Telemundo" or the "Company") being offered for resale from time to time by
Reliance Group Holdings, Inc. ("RGH"), Reliance Insurance Company, an indirect
wholly owned subsidiary of RGH ("RIC") and United Pacific Insurance Company, a
wholly owned subsidiary of RIC ("United" and collectively, the "Selling
Stockholders").
The shares of Series A Common Stock to which this Prospectus relates may be sold
from time to time by the Selling Stockholders through underwriters or dealers,
through brokers or other agents, or directly to one or more purchasers, at
market prices prevailing at the time of sale or at prices otherwise negotiated.
The Company will receive no portion of the proceeds of the sale of such shares
of Series A Common Stock and will bear the expense incident to the registration
of such shares.
The last reported sale price of Series A Common Stock as reported by Nasdaq
National Market on February 8, 1996, was $18-7/8.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is February 12, 1996.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information concerning the Company can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Commission's regional offices at Seven World Trade Center, Suite 1300, New York,
New York 10048 and Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such materials can be obtained from
the Commission at prescribed rates from the Public Reference Section of the
Commission at its principal office at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549.
The Company has filed with the Commission a Registration Statement on
Form S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933 (the "Securities
Act"), with respect to the securities offered hereby. This Prospectus, which
constitutes a part of the Registration Statement, does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information, reference is hereby made to the Registration Statement and
exhibits filed as a part thereof and otherwise incorporated therein and which
may be inspected and copied in the manner and at the sources described above.
Statements contained in this Prospectus as to the contents of any document
referred to are not necessarily complete, and in each instance reference is made
to such exhibit for a more complete description and each such statement is
qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents which have been filed by the Company with the
Commission are incorporated by reference into this Prospectus:
1. The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995 as amended by Form 10-Q/A filed November 27, 1995 and by Form
10-Q/A-2 filed January 31, 1996;
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1995 and June 30, 1995;
3. The Company's Current Reports on Form 8-K filed January 13,
1995, January 31, 1996 and February 7, 1996;
4. The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994;
5. The Company's Registration Statement on Form 8-A (the "Form 8-A")
under the Exchange Act filed with the Commission on December 9, 1994 (which
includes a description of the Company's common stock); and
6. All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of this Offering shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of filing
such documents.
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The Company has filed a registration statement under the Securities
Act to register a contemplated offering and sale of senior notes.
The preliminary prospectus which is a part of such
registration statement has also been filed under the Exchange Act as an
exhibit to a Current Report on Form 8-K filed on January 31, 1996 and an
amended preliminary prospectus has been filed as an exhibit to a Current
Report on Form 8-K filed on February 7, 1996. Such Current Reports and
exhibits are incorporated by reference into this Prospectus and a copy of
the most recent version of the preliminary prospectus will be delivered with
this Prospectus. There can be no assurance that the Company will offer the
senior notes for sale or consummate such offering and issue such senior notes
or that the terms of senior notes actually issued will not be materially
different from the terms described in such preliminary prospectus. If, during
the time the Selling Stockholders are required to deliver this Prospectus, the
preliminary prospectus for the senior notes is amended in any material manner,
or the offering of the senior notes is made, the Company will file the amended
or the final prospectus, as the case may be, under the Exchange Act as an
exhibit to a Current Report on Form 8-K. Such Current Report and exhibit will
be incorporated by reference into this Prospectus and a copy of such amended or
final prospectus, as the case may be, will be delivered with this Prospectus.
Any statement contained herein or in any document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for the purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed to
constitute a part of this Prospectus, except as so modified or superseded. The
Company will provide without charge to each person to whom a copy of this
Prospectus is delivered, including any beneficial owner, upon written or oral
request of such person, a copy of any or all of the information that has been
incorporated by reference in this Prospectus (excluding exhibits to such
information which are not specifically incorporated by reference into such
information.) Requests for such documents should be directed to the Company at
its principal executive offices, 2290 West 8th Avenue, Hialeah, Florida 33010
Attention: Shareholder Relations, telephone (305) 884-8200.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of Series A
Common Stock by the Selling Stockholders hereunder.
SELLING STOCKHOLDERS
At January 30, 1996, the Selling Stockholders beneficially owned
1,133,158 shares of Series A Common Stock (the "Reliance Shares")
representing approximately 18.6% of the outstanding Series A Common Stock and
approximately 11.2% of the total outstanding shares of Series A Common Stock
and Series B Common Stock, $.01 par value per share (the "Series B Common
Stock," and together with the Series A Common Stock, the "Common Stock").
The Reliance Shares include 138,889 shares of Series A Common Stock
represented by currently exercisable warrants held by RIC to purchase such
shares at an exercise price of $7.19 per share (the "RIC Warrants"). The RIC
Warrants remain exercisable for the five year period from December 30, 1995,
the date they became exercisable. The Reliance Shares also include 38 shares
of Series A Common Stock represented by currently exercisable warrants (32 of
which are held by RIC and 6 of which are held by RGH) to purchase such shares
at an exercise price of $7.00 per share (the "Reliance Creditor Warrants").
RIC also beneficially owns warrants to purchase 277,778 shares of Series A
Common Stock at an exercise price of $7.19 per share (the "RIC Additional
Warrants" and collectively with the RIC Warrants, the "Reliance Warrants"),
one-half of which warrants become exercisable on each of December 30, 1996
and 1997 for five-year periods from the date they become exercisable.
Neither the Reliance Creditor Warrants, the RIC Warrants, the RIC Additional
Warrants nor the shares underlying such warrants are being registered hereby.
Of the 1,133,158 shares of Series A Common Stock beneficially owned by the
Selling Stockholders, 980,155 shares, 14,000 shares and 76 shares are being
registered hereby on behalf of each of RIC, United and RGH, respectively.
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After completion of the sale by the Selling Stockholders, assuming the
sale of all shares of Series A Common Stock being offered hereby, (i) RIC
will beneficially own (A) the RIC Warrants and 32 of the Reliance Creditor
Warrants (the shares underlying which in the aggregate represent
approximately 2.3% of the outstanding Series A Common Stock and approximately
1.4% of the total shares of Common Stock outstanding) and (B) the RIC
Additional Warrants, (ii) RGH will own 6 of the Reliance Creditor Warrants and
(iii) United will not own any shares of Common Stock.
During the three year period prior to the date of this Prospectus and
until July 1994, RIC and its affiliates owned, in the aggregate,
approximately 78% of the common stock of the Company's predecessor. In July
1994, the ownership of RIC and its affiliates in the common stock of the
Company's predecessor was decreased to approximately 58%. On December 30,
1994, in connection with the consummation of the Company's Plan of
Reorganization (the "Plan"), all shares in the Company's predecessor were
cancelled and, (i) the Selling Stockholders purchased the Reliance Shares
and received the RIC Warrants, the Reliance Creditor Warrants and the RIC
Additional Warrants and (ii) the Company, RIC and certain other parties
entered into a registration rights agreement pursuant to which the Company
agreed to register under the Securities Act Common Stock held by RIC and
certain of its affiliates (collectively, the "Rights
Holders"). Under the registration rights agreement, the Company is
obligated, subject to certain terms and conditions and upon demand by the
Rights Holders, to use reasonable diligence to effect and to maintain for not
more than 90 days the registration under the Securities Act of certain
registrable securities as defined in the agreement. Under the terms of the
registration rights agreement, the Company has agreed to indemnify the
Selling Stockholders and the Selling Stockholders have agreed to indemnify
the Company against certain liabilities, including liabilities under the
Securities Act.
RIC is indirectly controlled by Saul P. Steinberg, members of his family
and affiliated trusts. Mr. Steinberg served as Chairman of the Company's
predecessor from February 1987 until December 1994. In addition, certain
executive officers and directors of RGH and RIC served as directors of the
Company or its predecessor until December 1994 except for Messrs. Saul P.
Steinberg and George E. Bello, each of whom served in such capacity until
February 1995. Prior to December 1994, the Selling Stockholders provided the
Company's predecessor with certain professional and specialized services and
with insurance coverage. The Selling Stockholders provided
the Company and its subsidiaries with certain insurance coverage at an aggregate
cost to the Company of approximately $910,000 which was paid in 1993,
$200,000 of which was payment for coverage provided in 1994. The Selling
Stockholders did not provide any services or insurance coverage to the Company
or any of its subsidiaries in 1995.
PLAN OF DISTRIBUTION
It is expected that the offering of the Series A Common Stock by the
Selling Stockholders will be effected from time to time in one or more
transactions in the Nasdaq National Market or in negotiated transactions, or a
combination of such methods of sale, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. The Selling Stockholders may effect such transactions by selling to or
through broker-dealers and such broker-dealers may receive compensation in the
form of underwriting discounts, concessions or commissions from the Selling
Stockholders or the purchasers of the Series A
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Common Stock for whom they may act as agent (which compensation may be in
excess of customary commissions). The Selling Stockholders and any
broker-dealers that participate with the Selling Stockholders in such a
distribution may be deemed to be underwriters. Any commissions received by
broker-dealers in a distribution and any profit on the sale by broker-dealers
in a distribution may be deemed to be underwriting discounts and commissions
under the Securities Act. Neither the Company nor the Selling Stockholders
can presently estimate the amount of such compensation. Other than as
indicated herein, the Company knows of no existing arrangements between the
Selling Stockholders and any other holder of Common Stock, underwriter,
dealer, or broker or other agent relating to the sale or distribution of the
shares of Series A Common Stock offered hereby.
Agents for the sale or distribution of the shares offered hereby, and
underwriters, if any, may engage in transactions with or perform services to the
Company or its affiliates in the ordinary course of business.
To comply with certain states' securities laws, if applicable, the shares
of Series A Common Stock offered hereby may be sold in such states only through
brokers or dealers.
Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of any of the shares of Series A Common
Stock offered hereby may not simultaneously engage in certain market
activities with respect to any of the Series A Common Stock for a period of
two or nine business days, as applicable, prior to the commencement of such
distribution. In addition, and without limiting the foregoing, the Selling
Stockholders will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including without limitation rules
10b-6 and 10b-7, which provisions may limit the timing of purchases of any of
the shares of Series A Common Stock.
The Company will pay the expenses of registering the shares of Series A
Common Stock being offered hereby by the Selling Stockholders.
DESCRIPTION OF CAPITAL STOCK
The statements set forth below are summaries of certain provisions relating
to the capital stock of the Company and are qualified in their entirety by the
provisions of the Company's Restated Certificate of Incorporation (the
"Restated Certificate"), a copy of which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, and the Company's
Form 8-A, which is incorporated herein by reference.
The Company is authorized to issue 21,000,000 shares, consisting of
1,000,000 shares of Preferred Stock, par value one cent ("Preferred Stock"),
and 20,000,000 shares of Common Stock, par value one cent, divided into two
series as follows: (i) 14,388,394 shares of Series A Common Stock and (ii)
5,611,606 shares of Series B Common Stock. At January 10, 1996, there were
no shares of Preferred Stock, 5,958,278 shares of Series A Common Stock and
4,041,922 shares of Series B Common Stock issued and outstanding.
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VOTING RIGHTS. Except as discussed below or as required by law, the holders
of the Series A Common Stock vote together with the holders of the Series B
Common Stock and are entitled to one vote for each share held of record on each
matter submitted to a vote of stockholders. Cumulative voting in the election of
directors is not permitted. Except as otherwise provided by law or in the
Restated Certificate or Amended and Restated By-Laws, the affirmative vote of
a majority of the shares represented at a meeting of stockholders and entitled
to vote on the matter submitted is required for stockholder approval.
DIVIDENDS AND LIQUIDATION. Holders of Common Stock are entitled to receive
ratably such dividends as may be lawfully declared by the Board of Directors and
paid by the Company and, in the event of liquidation, dissolution or winding up
of the Company, are entitled to share ratably in all assets available for
distribution after payment or provision for payment of the debts and other
liabilities of the Company, and of preferential amounts, if any, to holders of
any other class or series of stock of the Company. Any dividend paid in shares
of Common Stock shall be paid only in shares of Series A Common Stock.
CONVERSION AND PREEMPTIVE RIGHTS. The Series A Common Stock is neither
redeemable nor convertible, and the holders of Series A Common Stock have no
preemptive rights to purchase any securities of the Company. Shares of Series B
Common Stock are convertible on a one-for-one basis into shares of Series A
Common Stock at the option of the holder. All outstanding shares of Series B
Common Stock automatically convert into shares of Series A Common Stock on a
one-for-one basis immediately upon the earlier of (i) December 30, 1999 and (ii)
such time as there are less than 2,000,000 shares of Series B Common Stock
issued and outstanding as may be adjusted as a result of a recapitalization,
stock dividend, combination or stock split-up which results in a change in the
number of shares of Series B Common Stock. Shares of Series B Common Stock held
by a person shall also convert on a one-for-one basis into shares of Series A
Common Stock upon the transfer to a person other than certain permitted
transferees as described in the Restated Certificate. The Company may not issue
any additional shares of Series B Common Stock.
RESTRICTION ON OWNERSHIP AND TRANSFER. The Restated Certificate provides
that so long as the provisions of Section 310 of the Communications Act of
1934 (the "Communications Act") apply to the Company, except as provided by
law, not more than 25% of either (a) the aggregate number of shares of stock of
the Company outstanding in any series entitled to vote on any matter before a
meeting of stockholders shall at any time be voted, and (b) the aggregate
number of shares of stock of the Company outstanding, shall at any time be
owned of record, by or for the account of aliens or their representatives or
by or for the account of a foreign government or representative, or by or for
the account of any corporation organized under the law of a foreign country,
and the Restated Certificate contains restrictions on transfer if such
transfer would result in the aggregate number of shares of stock owned by
such entities exceeding 25% of the number of shares of stock then
outstanding. Additionally, any transfer of the Company's capital stock shall
not be permitted if such transfer would violate the Communications Act or the
rules promulgated thereunder.
OTHER PROVISIONS. Prior to the first date on which there are no
outstanding shares of Series B Common Stock ("Conversion"), the total number of
directors constituting the Board of Directors of the Company must be at least
nine (9) directors, the smallest number constituting a majority of whom are
elected by the holders of the Series B Common Stock, and the remainder of whom
are elected by the holders of the Series A Common Stock. Prior to Conversion,
any director of the Company may be removed from office without cause, at any
time, by the affirmative vote of stockholders representing not less than a
majority of the holders of the series of Common Stock that elected such
director. Any vacancy created by the removal of a director may be filled prior
to Conversion only by the holders of the series of Common Stock that elected the
director that was removed. After Conversion (a) the Board of Directors of the
Company will initially consist of the number of directors in office immediately
prior thereto, and thereafter such number as may be fixed in accordance with the
by-laws of the Company, (b) the directors will be elected solely by the holders
of the Series A Common Stock, and (c) any director may be removed and the
vacancy created by the removal filled in accordance with the provisions of the
Delaware General Corporation Law and the by-laws of the Company.
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Prior to Conversion, any vacancy in the Board of Directors, whether
arising from death, resignation, or any other cause (other than removal or an
increase in the number of directors), may be filled by a majority of the
remaining directors of the same series as the director who left the Board of
Directors or, if only one director of such series remains in office, then by
such sole director, in either case, though less than a quorum; or by the
stockholders of the series that elected such director at the next annual meeting
thereof or at a special meeting thereof. If there are no remaining directors of
the same series, a special meeting of stockholders of that series must be held
as soon as possible to elect the successor. Each director so elected will hold
office until his successor has been elected and qualified.
Prior to Conversion, in the event of a newly created directorship in the
Board of Directors of the Company resulting from an increase in the size of the
Board of Directors, half of the directors appointed to fill the vacancies
resulting therefrom will be Series A Common Stock directors and the remaining
newly appointed directors will be Series B Common Stock directors, in either
case selected by a majority of the directors of that series then in office,
though less than a quorum, or by the holders of the series of Common Stock
entitled to elect such director at the next annual meeting thereof or at a
special meeting thereof. From and after Conversion, any vacancy in the Board
of Directors will be filled in accordance with the provisions of the Delaware
General Corporation Law and the by-laws of the Company.
EXPERTS
The audited consolidated financial statements and the related financial
statement schedule incorporated in this Prospectus by reference from the
Company's Current Report on Form 8-K dated January 31, 1996, Current Report
on Form 8-K filed February 7, 1996 and from the Company's Annual Report on
Form 10-K for the year ended December 31, 1994 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts in accounting and
auditing.
The financial statements of Video 44 as of December 31, 1994 and 1993 and
for each of the two years in the period ended December 31, 1994 incorporated in
this Prospectus by reference from the Company's Current Report on Form 8-K dated
January 31, 1996 have been so included in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
LEGAL MATTERS
The validity of the shares of Series A Common Stock offered hereby and
certain legal matters have been passed upon for Telemundo by Akin, Gump,
Strauss, Hauer & Feld, L.L.P.
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR A SOLICITATION BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY
ONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
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TABLE OF CONTENTS
PAGE
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Incorporation By Reference . . . . . . . . . . . . . . . . . . . . . . . . 2
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Use Of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Plan Of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Description of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . 6
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
TELEMUNDO GROUP, INC.
994,231 SHARES
SERIES A COMMON STOCK,
$.01 PAR VALUE
PROSPECTUS
DATED FEBRUARY 12, 1996
