<PAGE> 1
Prospectus Supplement filed pursuant to Rule 424(b)(3)
Registration No. 333-20619
KATZ MEDIA CORPORATION
PROSPECTUS SUPPLEMENT DATED JULY 17, 1997
TO
PROSPECTUS DATED APRIL 15, 1997
$100,000,000
10 1/2% SERIES B SENIOR
SUBORDINATED NOTES DUE 2007
This Prospectus Supplement dated July 17, 1997 to the Prospectus dated
April 15, 1997 of Katz Media Corporation (the "Company"), as supplemented on
May 28, 1997, relating to $100,000,000 10 1/2% Series B Senior Subordinated
Notes due 2007 (the "Notes") of the Company and the guarantees thereon by each
of Katz Communications, Inc., Katz Millennium Marketing Inc., Banner Radio
Sales, Inc., Christal Radio Sales, Inc., Eastman Radio Sales, Inc., Seltel
Inc., Katz Cable Corporation and The National Payroll Company, Inc., hereby
supplements the Prospectus dated April 15, 1997, as supplemented, by including
the information set forth in the attached Current Report on Form 8-K dated July
17, 1997 of Katz Media Group, Inc., which describes a Merger Agreement
providing for the merger of Katz Media Group, Inc. with a jointly owned
subsidiary of Evergreen of Media Corporation and Chancellor Broadcasting
Company.
The Company is not a party to the Merger Agreement or the merger
provided for therein. However, upon consummation of the tender offer described
in the attached Current Report on Form 8-K, the Company expects that a "Change
of Control" (as defined in the indenture relating to the Notes) will occur and
that the Company will become obligated to comply with the provisions described
in the Prospectus under "Description of Notes - Repurchase at the Option of
Holders - Change of Control".
<PAGE> 2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 14, 1997
KATZ MEDIA GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-13674 13-3779269
- --------------------------------------------------------------------------------
(State of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
125 West 55th Street, New York, New York 10019
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 424-6000
<PAGE> 3
Item 5. Other Events
On July 14, 1997, the Registrant entered into a definitive merger
agreement with Chancellor Broadcasting Company ("Chancellor"), Evergreen Media
Corporation ("Evergreen") and Morris Acquisition Corporation ("Morris"), a
corporation jointly owned by Chancellor and Evergreen, pursuant to which Morris
will acquire the Registrant. Under the terms of the merger agreement, which
was unanimously approved by the board of directors of each company, Morris will
commence a cash tender offer at $11.00 per share, net to the seller, for all of
the issued and outstanding common stock of the Registrant. As soon as
practicable following the conclusion of the tender offer, Morris would initiate
a merger through which any remaining shares of the Registrant not otherwise
purchased by Morris in the tender offer would be converted in the merger into
the right to receive the merger consideration equal to the tender offer price,
in cash without interest.
In connection with the transaction, Thomas Olson, James E. Beloyianis
and Stuart Olds (collectively, the "Management Stockholders") entered into a
Management Tender Agreement and shareholders affiliated with Donaldson, Lufkin
& Jenrette Securities Corporation (collectively, the "DLJ Stockholders")
entered into a Stockholder Tender Agreement with Chancellor, Evergreen and
Morris pursuant to which, among other things, the Management Stockholders and
the DLJ Stockholders have agreed to tender (and not withdraw except in
specified circumstances) their shares in the tender offer and vote in favor of
the merger.
Item 7. Financial Statements and Exhibits
(c) Exhibits
2.1 Merger Agreement, dated as of July 14, 1997, by and
among Chancellor, Evergreen, Morris and the Registrant.
10.1 Stockholder Tender Agreement, dated as of July 14,
1997, by and among the DLJ Stockholders, Chancellor,
Evergreen and Morris
10.2 Management Tender Agreement, dated as of July 14, 1997,
by and among the Management Stockholders, Chancellor,
Evergreen and Morris.
99.1 Press release dated July 14, 1997.
<PAGE> 4
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.
KATZ MEDIA GROUP, INC.
By: /s/ Richard E. Vendig
--------------------------------
Richard E. Vendig
Senior Vice President
Chief Financial &
Administrative Officer
Treasurer
Date: July 17, 1997
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- ----------- --------
<S> <C> <C>
2.1 Merger Agreement, dated as of July 14, 1997,
by and among Chancellor, Evergreen, Morris
and the Registrant.
10.1 Stockholder Tender Agreement, dated as of
July 14, 1997, by and among the DLJ Stockholders,
Chancellor, Evergreen and Morris
10.2 Management Tender Agreement, dated as of July
14, 1997, by and among the Management
Stockholders, Chancellor, Evergreen and Morris.
99.1 Press release dated July 14, 1997.
</TABLE>
<PAGE> 6
NEWS RELEASE
FOR IMMEDIATE RELEASE
EVERGREEN MEDIA AND CHANCELLOR BROADCASTING
TO ACQUIRE KATZ MEDIA GROUP, NATION'S PREMIER FULL-SERVICE MEDIA
REPRESENTATION FIRM, FOR $11.00 IN CASH PER SHARE
-----------------
IRVING and DALLAS, TEX. and NEW YORK, N.Y. - July 14, 1997 --
Evergreen Media Corporation (Nasdaq: EVGM), Chancellor Broadcasting Company
(Nasdaq: CBCA), Katz Media Group, Inc. (AMEX: KTZ) and Hicks, Muse, Tate &
Furst Incorporated today announced that Evergreen Media, Chancellor
Broadcasting and Katz Media have entered into a definitive agreement pursuant
to which a jointly owned affiliate of Evergreen Media and Chancellor
Broadcasting will acquire Katz Media in a transaction valued at approximately
$373 million. Katz Media will ultimately be owned by Chancellor Media
Corporation upon consummation of the pending merger of Evergreen Media and
Chancellor Broadcasting. Katz Media will retain its name, organizational
identity, management team, personnel, New York headquarters and 65 regional
sales offices.
Under the terms of the agreement, which was unanimously approved by
the boards of directors of each of the three public companies, Evergreen Media
and Chancellor Broadcasting will acquire Katz Media through a tender offer in
which Katz Media shareholders will receive $11.00 in cash for each share they
hold. The transaction value is based on the approximately 14.1 million Katz
Media shares and the assumption of approximately $218 million of Katz Media
debt. Shareholders representing approximately 51.6% of Katz Media's
outstanding common stock, including the company's largest shareholder, DLJ
Merchant Banking Partners, L.P., and certain of Katz Media's executive
officers, have agreed to tender their shares in the offer and vote in favor of
the transaction. Under the terms of the agreement, shares not
<PAGE> 7
purchased in the tender offer will be converted in a second-step merger into
the right to receive $11.00 per share in cash subject to statutory dissenters'
rights.
Katz Media, with a sales organization of approximately 1,500 people,
is the only full-service media representation firm in the United States serving
multiple types of electronic media, with leading market shares in the
representation of radio and television stations, cable television systems and
Internet media outlets. The company is exclusively retained by over 2,000
radio stations, 340 television stations and 1,390 cable systems and a growing
number of Internet Web sites and other interactive media providers to sell
national spot advertising time throughout the United States and through its
Katz International Limited subsidiary in the United Kingdom. In 1996, Katz
Media generated $183 million in revenues and EBITDA of $44.1 million.
Thomas O. Hicks, Chairman of Chancellor Broadcasting, Chairman and
C.E.O. of Hicks, Muse, Tate & Furst Incorporated and Chairman designate of the
new Chancellor Media Corporation, said, "Hicks Muse, which is one of the most
significant investors in broadcasting and cable properties in the nation and
which will be Chancellor Media's largest shareholder, recognizes that the Katz
Media organization, over its 109-year history, has built a strong franchise and
a quality brand name as the nation's premier media representation company.
This transaction will provide Katz Media with the financial resources and
operating autonomy necessary to retain and attract the most talented personnel
and invest in the most advanced technology and thereby continue to best serve
its thousands of radio, television, cable, new media and Internet clients."
Commenting on the transaction, Scott K. Ginsburg, Chairman and Chief
Executive Officer of Evergreen Media and Chief Executive Officer designate of
the new Chancellor Media Corporation, said, "As the largest client of Katz
Media, we view the opportunity to acquire the company as an excellent strategic
and financial transaction, and we are delighted that the Katz Media team has
chosen to become a key part of the new Chancellor Media Corporation.
"Through this attractively valued transaction, Evergreen Media and
Chancellor Broadcasting are adding a new independent operating unit on a basis
that we expect will be accretive for the new Chancellor Media. As clients, we
are intimately aware of the highly talented,
<PAGE> 8
effective sales team which Katz Media's CEO Tom Olson, radio chief Stu Olds and
television head Jim Beloyianis direct. The organization is a recognized leader
in its industry."
"With ongoing, significant listener growth, radio has emerged as a hot
advertising medium, attracting a greater number of national advertisers. This
business combination is intended to allow Evergreen Media, Chancellor
Broadcasting and the many other radio companies served by Katz Media to
continue to capture a growing base of national advertisers. We also expect to
further broaden the Katz Media organization's resources and capabilities to
serve existing clients and new, exciting advertising media such as the
Internet, where Katz Media has already emerged as a leader."
Tom Olson, President and Chief Executive Officer of Katz Media, who
will continue to head the Katz Media management team and organization following
completion of the transaction, commented, "Having known Scott Ginsburg and Jim
de Castro of Evergreen, Steve Dinetz of Chancellor Broadcasting and the
partners of Hicks Muse for many years, we have tracked their rapid growth and
creation of value for their investors. All of us at Katz Media are extremely
pleased to join the Evergreen and Chancellor teams, whose senior executives
have a proven track record and an intimate knowledge of our business and who
share our commitment to the industry. We believe our alliance will further
strengthen Katz Media, creating synergies and efficiencies that will enhance
our ability to serve the needs of our clients, the advertising community and
our employees."
Smith Barney Inc. served as advisor to Evergreen Media and Chancellor
Broadcasting and Donaldson, Lufkin & Jenrette Securities Corporation advised
Katz Media with regard to the transaction. Smith Barney has rendered fairness
opinions to the Boards of Directors of Evergreen Media and Chancellor
Broadcasting. Credit Suisse First Boston has rendered its opinion to the Board
of Directors of Katz Media that the transaction is fair to Katz Media's
stockholders from a financial point of view.
Completion of the transaction is subject to the tender of a majority
of Katz Media shares on a fully diluted basis in the tender offer, shareholder
and regulatory approval, including
<PAGE> 9
expiration of the applicable Hart-Scott-Rodino waiting period, and other
customary closing conditions. The offer will be made only pursuant to
definitive offering documents under the Securities Exchange Act of 1934. The
transaction is expected to be consummated in the third quarter of 1997 and is
not subject to financing.
Chancellor Media Corporation will be formed by the currently pending
merger of Evergreen Media Corporation and Chancellor Broadcasting Company, as
well as radio properties acquired from Viacom Inc. and the acquisition of five
radio stations from Pacific and Southern Company, Inc., a wholly-owned
subsidiary of Gannett Company, Inc. Upon consummation of all announced
transactions, Chancellor Media will own and operate 98 radio stations in 21 of
the nation's largest markets.
The above statements contain forward-looking statements. Such
forward-looking statements are subject to inherent uncertainties and to a wide
variety of significant business, economic and competitive risks. Such
uncertainties and risks include, among others: certain risks associated with
the closing and integration of acquisitions; competition; government
regulation; general economic and business conditions; and dependence on key
personnel. Actual events, circumstances, effects and results may vary
significantly from those included in or contemplated or implied by such
forward-looking statements. Consequently, the forward-looking statements
contained herein should not be regarded as representations by Evergreen,
Chancellor or any other person that the projected outcomes can or will be
achieved.
CONTACTS:
Evergreen Media Corporation Jaffoni & Collins Incorporated
Matthew E. Devine David C. Collins
Chief Financial Officer Joseph N. Jaffoni
972/869-9020 212/505-3015
Katz Media Group, Inc. Chancellor Broadcasting Company and
Ellen Strahs Fader Hicks, Muse, Tate & Furst Incorporated
212/424-6863 Roy Winnick
Kekst and Company
212/521-4842
# # #
