During the following weeks, representatives of MediaCo and Estrella discussed the proposed combination transaction, including with Fried, Frank, Harris, Shriver & Jacobson LLP, transaction counsel to MediaCo (“Fried Frank”), and Paul, Weiss, Rifkind, Wharton & Garrison LLP, transaction counsel to Estrella (“Paul Weiss”). Additionally, representatives of MediaCo and Fried Frank began discussions with WhiteHawk and its counsel at Sidley Austin LLP (“Sidley”) regarding the incurrence of debt financing by MediaCo for the transaction.
On November 22, 2023, Fried Frank and Paul Weiss exchanged initial legal due diligence request lists. From this date until mid-April 2024, representatives of MediaCo, Estrella, Fried Frank, and Paul Weiss provided responses to the diligence requests submitted by both parties and their respective counsel and conducted due diligence in connection with the proposed transaction.
On December 6, 2023, Fried Frank provided Paul Weiss with an initial draft transaction agreement, which was updated, based on discussions between the parties, pursuant to a draft agreement provided on February 14, 2024, by Fried Frank to Paul Weiss.
On February 22, 2024, our board of directors held a special meeting. Our board of directors, with all directors in attendance, was joined by members of MediaCo management and representatives of Fried Frank. MediaCo management provided our board of directors with an overview of discussions with Estrella relating to the proposed transaction, and representatives of Fried Frank reviewed the fiduciary duties of the directors in connection with their evaluation of the proposed transaction as well as the key terms of the proposed transaction agreement. Our board of directors discussed, among other things, the potential benefits, risks, and uncertainties of the proposed transaction and directed MediaCo management to work with Fried Frank to continue pursuing the proposed transaction.
From this time until the execution of the definitive transaction agreement, representatives of Fried Frank and Paul Weiss exchanged and negotiated drafts of the documentation for the transaction.
On March 27, 2024, Sidley sent an initial draft of the First Lien Credit Agreement for the Financing Transaction to Fried Frank. During the period from March 27, 2024 to April 17, 2024, representatives of WhiteHawk, Sidley, MediaCo, and Fried Frank prepared and finalized the negotiation of the financing documentation.
On March 28, 2024, our board of directors held a special meeting. Our board of directors, with all directors in attendance, was joined by members of MediaCo management and representatives of Fried Frank. MediaCo management provided our board of directors with an update on the status of negotiations with Estrella and WhiteHawk. Representatives of Fried Frank then provided our board of directors with key updates regarding the ongoing negotiation of material terms under the transaction and financing documentation. Our board of directors directed MediaCo management and its advisors to move forward with negotiating the final aspects of the proposed transaction and to return to our board of directors upon finalizing such negotiations.
From March 28, 2024 through April 16, 2024, representatives from MediaCo management, Estrella management, HPS, WhiteHawk, Fried Frank, Paul Weiss and Sidley continued to negotiate the terms of the transaction and financing and revise the transaction and financing documentation.
On the evening of April 16, 2024, our board of directors held a special meeting to consider approving the proposed transaction and the entry into the transaction and financing documentation. MediaCo management provided our board of directors with an update on the status of final negotiations with Estrella and WhiteHawk. Representatives of Fried Frank reviewed the fiduciary duties of the directors in connection with their evaluation of the proposed transaction, and representatives of Fried Frank described the proposed final terms of the transaction and financing documents. Our board of directors then discussed the proposed transaction and, after carefully considering the matters discussed at that meeting and at prior meetings of our board of directors, adopted resolutions which, among other things: (i) determined and resolved that the transaction documentation was advisable and in the best interest of MediaCo and its stockholders; (ii) authorized MediaCo’s execution and delivery of the transaction documentation and authorized the issuance of 60,000 shares of Series B Preferred Stock, a warrant to purchase up to 28,206,152 Class A Shares, exercisable at an exercise price of $0.00001 per share, and a term loan in the principal amount of $30 million, each to an affiliate of HPS; and (iii) determined to recommend that MediaCo’s stockholders vote in favor of the Issuance Proposal.
Following the approval of our board of directors, on April 17, 2024, the parties executed the transaction and financing documentation.
