SAN FRANCISCO, Jan. 8 /PRNewswire-FirstCall/ -- PlanetOut Inc.
(Nasdaq: LGBT) announced today that it has signed a definitive merger
agreement to combine with Here Networks LLC and Regent Entertainment Media Inc.
PlanetOut serves the lesbian, gay, bisexual and transgender, or LGBT,
community through its websites, Gay.com and PlanetOut.com. Here Networks is a
leading provider of programming services to cable and satellite television and
internet platforms of movies, series, documentaries and other content
specially tailored for the LGBT community. Regent Entertainment Media is the
publisher of magazines directed to the LGBT community including The Advocate,
Out and HIVPlus.
The combined public company will be called Here Media Inc., with Stephen P.
Jarchow as Chairman and Paul Colichman as CEO. The board of directors of the
new company will initially consist of Mr. Jarchow, Mr. Colichman, and Phil
Kleweno, PlanetOut's Chairman.
The transaction will be effected through a contribution by the owners of
Here Networks and Regent Entertainment Media of those businesses and a minimum
of $4.7 million of cash into Here Media, a newly formed holding company.
PlanetOut will concurrently be merged with a wholly owned subsidiary of Here
Media. Following the contribution and the merger, all three companies will be
subsidiaries of Here Media.
Under the terms of the agreement, PlanetOut stockholders will receive one
share of Here Media common stock, together with one share of Here Media
special stock, for each share of PlanetOut stock that the stockholder owns
immediately prior to the effective time of the merger, which will result in
the former PlanetOut stockholders owning 20% of Here Media's common stock and
100% of its outstanding special stock. The owners of Here Networks and Regent
Entertainment Media will receive that number of shares of Here Media's common
stock such that they will own 80% of Here Media's common stock following the
merger and the contributions. The special stock is being issued to provide a
limited form of downside protection in the event of a liquidation, dissolution
or winding up of Here Media or a sale of Here Media for cash or marketable
securities within four years after the merger and in which the holders of Here
Media common stock would, but for the effect of the special stock, receive
less than $4.00 per share. In that event, the holders of special stock would
be entitled to a priority claim on any liquidation proceeds otherwise
distributable to holders of Here Media common stock in an amount such that the
liquidation proceeds they receive, when added to the liquidation proceeds
payable on an equal number of shares of Here Media common stock after giving
effect to the liquidation priority of the special stock would equal $4.00 of
total liquidation proceeds, to the extent such funds are available after
payments of all creditor claims and all liquidation preferences and accrued
dividends payable to holders of preferred stock, if any. Neither the common
stock nor the special stock of Here Media is currently expected to be listed.
"Following a very thorough review of all of the strategic alternatives
available to us, and the proposed transaction, our Board concluded that the
opportunity to combine with Here Networks and Regent Entertainment Media was
in the best interests of PlanetOut's stockholders," said Karen Magee,
PlanetOut's CEO. "We believe that the strategic fit between PlanetOut and
Here Media, and the complementary nature of these respective businesses, their
client bases, and their audiences, will result in a combined company with
greater financial and market strength than either business on its own."
"This business combination will unite a powerful broadband video solution
with an iconic brand and a leading URL in the LGBT community," said Paul
Colichman, CEO of Here Networks. "We are extremely excited about the
opportunity to leverage this exceptional collection of assets to expand our
audience, grow our revenues, and increase stockholder value."
Allen & Company LLC acted as financial advisor to PlanetOut. Viant
Capital LLC has also provided PlanetOut with a fairness opinion.
Howard Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation,
is acting as legal counsel to PlanetOut.
Mayer Brown LLP is acting as legal counsel to Here Media, Here Networks
and Regent Entertainment Media.
The agreement is subject to the affirmative vote of the holders of a
majority of the outstanding shares of PlanetOut common stock, regulatory
filings and approvals, and certain other closing conditions. The parties hope
to close the transaction in or before the second quarter of 2009.
The companies will host a conference call to discuss the transaction
beginning at 2:00 p.m. PT on Tuesday, January 20th, 2009. The dialing
instructions for the call are:
In the United States: 866-866-2244
Outside the U.S.: 404-260-1415
Passcode: 8415874#
About PlanetOut Inc.
PlanetOut Inc. is a leading media and entertainment company exclusively
serving the lesbian, gay, bisexual and transgender (LGBT) community.
PlanetOut's digital media brands include two of the longest-established LGBT
sites on the Web, gay.com and PlanetOut.com - both of which are known for
their robust online communities as well as their entertainment, news, fitness,
health, style, and travel content. PlanetOut is based in San Francisco. For
more information, please visit http://www.planetoutinc.com.
About Regent Entertainment Media
Regent Entertainment Media publishes magazines and books for the gay and
lesbian market with brands including The Advocate, Out, and HIV Plus, as well
as the Alyson Books publishing division. Regent Entertainment Media's online
presence incorporates the award-winning Advocate.com, Out.com, and
HIVPlusMag.com as well as the new SheWired.com, and Gaysports.com. The company
has offices in Los Angeles and New York. For more information please visit
http://www.regentmedia.com.
About Here Networks
The company includes here!, a leading gay and lesbian television network.
Founded in 2002, here! airs on all major U.S. cable systems as a 24-hour
subscription service. here! offers a wide variety of groundbreaking and
acclaimed original movies and series plus a large collection of films
appealing to the LGBT audience. here! Video, the broadband portal of Here
Networks found at http://www.heretv.com/videoplayer, provides a broad sampling
of here! programming. The company has offices in Los Angeles and New York.
For more information on please visit http://www.heretv.com.
Forward-Looking Statements
In addition to the historical information contained herein, this press
release contains forward-looking statements, including statements regarding
the proposed business combination, the timing thereof and the potential
synergies resulting from the transaction, as well as statements containing the
words "believes," "anticipates," "expects," and similar words. Such forward-
looking statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of the
companies to differ materially from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the timing of regulatory and stockholder
approvals, the limited operating history and variability of operating results
of the parties to the transaction; competition; timing of product launches;
success of marketing efforts; and dependence on technology infrastructure,
cable and satellite operators, and the Internet.
Nothing in this communication shall constitute a solicitation to buy or an
offer to sell shares of Here Media, Inc., the new public company referenced
above. The offer and sale of such shares in the transaction will only be made
pursuant to an effective registration statement. Stockholders are urged to
read the Proxy Statement/Prospectus that will be included in the registration
statement on Form S-4 concerning this transaction to be filed with the
Securities and Exchange Commission ("SEC") because it will contain important
information. Investors will be able to obtain this document when filed for
free from the SEC's web site at http://www.sec.gov or from PlanetOut by
contacting its corporate secretary.
PlanetOut and its directors and executive officers may be deemed, under
SEC rules, to be participants in the solicitation of proxies from PlanetOut's
stockholders with respect to the proposed transaction. Information regarding
PlanetOut and its directors and executive officers is included in its annual
report on Form 10-K filed with the SEC on March 11, 2008 and in other public
filings made from time to time with the SEC, which are available on the SEC's
website. More detailed information regarding the identity of potential
participants and their direct or indirect interests in the transaction, by
securities holdings or otherwise, will be set forth in the registration
statement and proxy statement/prospectus and other documents to be filed with
the SEC in connection with the proposed transaction.
