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EXHIBIT 99
NEWS ANNOUNCEMENT FOR IMMEDIATE RELEASE
HARVEY ANNOUNCES TERMINATION
OF CLASSIC MEDIA TRANSACTION
LOS ANGELES, CA - November 1, 2000 -- The Harvey Entertainment Company (NASDAQ:
HRVY) announced today that the proposed preferred stock investment by Classic
Media LLC has been called off due to the parties' inability to reach agreement
on definitive documentation.
On August 24, 2000, Harvey announced that it had signed a Letter of Intent with
Classic Media for an investment of approximately $30 million in exchange for a
new issue of Harvey Preferred Stock convertible into Common Stock at $3.00 per
share. After completion of its due diligence, Classic Media and Harvey amended
the Letter of Intent to reduce the conversion price to $2.85 per share, and
Classic Media increased its escrow deposit to $1 million. In two proposed draft
agreements, Classic Media insisted upon an adjustment mechanism to further
reduce the amount invested and the conversion price, which Harvey rejected as
not contemplated by the Letter of Intent. Unable to secure Harvey's agreement to
this change, Classic Media terminated the transaction and requested the return
of its deposit.
In a meeting held yesterday, Harvey's Board directed management to secure the $1
million deposit for Harvey's account. In addition, the Board also authorized
management to seek alternative financing or strategic transactions, which Harvey
is now free to pursue given the termination of the Letter of Intent by Classic
Media. Finally, Harvey's Board directed management to seek cost-cutting methods
to conserve the Company's cash reserves and to reduce overhead.
There is no assurance that an alternative transaction will be available on
suitable terms. However, with the contemplated cost reductions, management
expressed confidence that Harvey would be able to continue operations while it
seeks a merger partner or other investment transaction.
The Harvey Entertainment Company is a diversified entertainment company engaged
in the management and exploitation of branded characters through merchandising,
licensing and all entertainment media. Harvey has an entertainment library
consisting of over 150 motion pictures and 165 television episodes, including 91
episodes of Harvey classic animation. The Harvey Classic Character brands
include hundreds of characters such as Casper, the Friendly Ghost, Richie Rich,
the Ghostly Trio, Little Audrey, Herman and Katnip, Wendy the Witch and many
others. For further information regarding The Harvey Entertainment Company,
visit the Company' web site at http://www.harvey.com.
This press release contains forward-looking statements as defined in the Private
Securities Litigation Reform Act of 1995. Readers are cautioned not to place
undue
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THE HARVEY ENTERTAINMENT COMPANY, 11/1/00 page 2 of 2
reliance on these forward-looking statements. These forward-looking statements
involve risks and uncertainties, including timely development and upgrades to
existing products, the impact of competitive products and pricing, and other
risks detailed from time to time in the Company's filing with the Securities and
Exchange Commission (SEC). In particular, the Company's Form 10-K filed with the
SEC in 2000 for the year ended December 31, 1999.
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CONTACT:
COMPANY MEDIA INVESTOR RELATIONS
Glenn R. Weisberger David Bowers David C. Collins
SVP & CFO Harvey Entertainment Jaffoni & Collins
Harvey Entertainment 310/444-4100 or 212/835-8500 or
310/444-4100 [email protected] [email protected]
