8-K
Townsquare Media, Inc. (TSQ)
UNITED STATES
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): January 24, 2021
Townsquare Media, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-36558 | 27-1996555 | ||
|---|---|---|---|---|
| (State or other jurisdiction of incorporation or organization) | (Commission file number) | (I.R.S. Employer Identification No.) | ||
| One Manhattanville Road, | Suite 202 | |||
| Purchase, | New York | 10577 | ||
| (Address of Principal Executive Offices, including Zip Code) |
(203) 861-0900
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Check the appropriate box below if Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a - 12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Class A Common Stock, $0.01 par value per share | TSQ | The New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
Stock Repurchase Agreement
On January 24, 2021, Townsquare Media, Inc. (the “Company”) entered into an agreement (the “Stock Repurchase Agreement”) with certain affiliates (the “Sellers”) of Oaktree Capital Management L.P. (“Oaktree”) to repurchase 606,484 shares of the Company’s Class A common stock, par value $0.01 per share (the “Class A Common Stock”), 2,151,373 shares of the Company’s Class B common stock, par value $0.01 per share (the “Class B Common Stock”), and 7,242,143 warrants to purchase Class A Common Stock (the “Warrants” and, together with the Class A Common Stock and the Class B Common Stock, the “Securities”) or such greater number of Securities as the Company may elect, in a private transaction. The purchase price is $6.40 per Security and, subject to the Company’s election to purchase a greater number of Securities, the aggregate purchase price is $64 million. The closing of the repurchase (the “Closing”) of the Securities from the Sellers pursuant to the Stock Repurchase Agreement is subject to the satisfaction of customary closing conditions, including approval by the Federal Communications Commission (the “FCC”).
Additionally, pursuant to the Stock Repurchase Agreement, the Sellers granted the Company an option to purchase all of the Sellers’ remaining Securities, and the Company granted the Sellers an option to sell all or a portion of their remaining Securities, the date that is fifteen (15) months from the Closing at a purchase price per Security of $6.40. Such purchase would be subject to the satisfaction of customary closing conditions, including FCC approval.
The Stock Repurchase Agreement contains customary representations, warranties and covenants of the parties.
The foregoing description of the Stock Repurchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Stock Repurchase Agreement, a copy of which is filed herewith as Exhibit 10.1 and is incorporated by reference herein.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 25, 2021, the Company’s Board of Directors determined that it was in the best interests of the Company and its stockholders to amend the Company’s 2014 Omnibus Incentive Plan (the “Plan”) to increase the number of shares of Common Stock (as defined in the Plan) available for grant under the Plan from 12,000,000 shares to 27,000,000 shares, pursuant to the Amendment to the Plan (the “Amendment”). Subsequently, on January 25, 2021, the Board of Directors submitted the Amendment to certain stockholders affiliated with Oaktree for approval. By written consent delivered to the Company on January 27, 2021, the Oaktree-affiliated stockholders, representing approximately 52.4% of the voting power of the Company, approved the Amendment.
The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, a copy of which is filed herewith as Exhibit 10.2 and is incorporated by reference herein.
Item 5.07 Submission of Matters to a Vote of Security Holders.
The information set forth under Item 5.02 above is incorporated by reference into this Item 5.07.
Item 7.01. Regulation FD Disclosure.
On January 25, 2021, the Company issued a press release announcing that the Company entered into the Stock Repurchase Agreement with the Sellers to repurchase Securities for an aggregate purchase price of $64 million, subject to the Company’s election to purchase a greater number of Securities. A copy of the press release is furnished with this Current Report on Form 8-K and attached hereto as Exhibit 99.1.
In accordance with General Instruction B.2 of Form 8-K, the information included under this Item 7.01 in this Current Report on Form 8-K shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Forward-Looking Statements
Except for the historical information contained in this Current Report on Form 8-K, the matters addressed are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements
often discuss the Company’s current expectations. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “could,” “would,” “will,” the negatives thereof and other words and terms. The forward-looking statements contained in this Current Report on Form 8-K include, but are not limited to, statements related to the consummation of the stock repurchase pursuant to the Stock Purchase Agreement, the timing thereof and the potential exercise of the Company’s option to purchase all of the Sellers’ remaining Securities, or the Sellers’ option to sell all or a portion of their remaining Securities to the Company. By nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements. Forward-looking statements are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements, which speak only as of the date hereof or as of the date specified herein. See “Risk Factors” and “Forward-Looking Statements” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission (the “SEC”) on June 9, 2020, and subsequent filings with the SEC, for a discussion of factors that could cause the Company’s actual results to differ from those expressed or implied by forward-looking statements. The Company assumes no responsibility to update any forward-looking statement as a result of new information, future events or otherwise.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are filed as part of this report:
| Exhibit No. | Description |
|---|---|
| 10.1 | Stock Repurchase Agreement, dated January 24, 2021, between Townsquare Media, Inc. and the Sellers party thereto. |
| 10.2 | Amendment to the Townsquare Media, Inc. 2014 Omnibus Incentive Plan |
| 99.1 | Press Release, dated January 25, 2021, issued by Townsquare Media, Inc. |
| 104 | Cover Page Interactive Data File (cover page XBRL tags are embedded within the Inline XBRL document). |
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.
| Date: January 28, 2021 | TOWNSQUARE MEDIA, INC. | |
|---|---|---|
| By: | /s/ Stuart Rosenstein | |
| Name: | Stuart Rosenstein | |
| Title: | Executive Vice President and Chief Financial Officer |
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tsq-stockrepurchaseagree
Document
AMENDMENT TO THE
TOWNSQUARE MEDIA, INC.
2014 OMNIBUS INCENTIVE PLAN
January 27, 2021
This Amendment (this “Amendment”) to the Townsquare Media, Inc. 2014 Omnibus Incentive Plan (the “Plan”), dated as of January 27, 2021, has been approved by the board of directors and the holders of a majority of the issued and outstanding shares of Townsquare Media, Inc., a Delaware corporation (the “Company”).
AMENDMENT
Section 1. Defined Terms. Unless otherwise defined herein, all capitalized terms used herein shall have the meanings given them in the Plan.
Section 2. Authority to Amend the Plan. Pursuant to Article XII of the Plan, the Board may amend the Plan at any time for any purpose, which may at the time be permitted by law. The Board has determined that this Amendment does not materially and adversely affect any Participant’s rights under any outstanding Award, and as such, Participant approval is not required to effectuate this Amendment.
Section 3. Amendment to the Plan. Section 4.1 of the Plan is hereby amended by deleting the first sentence of such section in its entirety and replacing such sentence with the following, in order to increase the number of shares of Common Stock reserved for issuance with respect to Awards:
“The aggregate number of shares of Common Stock that may be issued or used for reference purposes or with respect to which Awards may be granted under the Plan shall not exceed 27,000,000 (subject to any increase or decrease pursuant to Section 4.2) (the “Share Reserve”), which may be either authorized and unissued Common Stock or Common Stock held in or acquired for the treasury of the Company or both.”
Section 4. Effect on the Amendment. Except as expressly amended hereby, the Plan shall remain in full force and effect. Any reference to the Plan contained in any notice, request or other document executed concurrently with or after the execution and delivery of this Amendment shall be deemed to include this Amendment unless the context shall otherwise require.
Section 5. Governing Law. This Amendment shall be construed and interpreted in accordance with the laws of the State of Delaware (without reference to any choice of law rules that would require the application of the laws of any other jurisdiction).
Section 6. Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purposes.
* * * * *
Document
IMMEDIATE RELEASE
TOWNSQUARE ANNOUNCES SIGNIFICANT SHARE REPURCHASE
OF A MINIMUM OF 10 MILLION SHARES
Purchase, NY - January 25, 2021 - Townsquare Media, Inc. (NYSE: TSQ) (the “Company” or “Townsquare”) announced that it has entered into an agreement to repurchase a minimum of 10 million of the 12.5 million shares of Class A common stock, shares of Class B common stock and warrants held by funds managed by Oaktree Capital Management L.P. (collectively, “Oaktree”), for $6.40 per security, which reflects a 19% discount from the closing price of the Class A common stock on Friday, January 22, 2021. The repurchase was approved by the Board of Directors following the recommendation of a committee of independent and disinterested directors (the “Special Committee”). With this transaction, Oaktree will be selling approximately one third of its Class A common stock, all of its Class B common stock (each share of which is entitled to ten votes per share on each matter submitted to a vote of stockholders) and at least the majority of its warrants. The aggregate purchase price is expected to be at least $64 million, subject to the Company’s ability to elect to purchase additional securities at closing of the repurchase.
The closing of the repurchase is subject to the satisfaction of customary closing conditions, including short form approval by the Federal Communications Commission (the “FCC”). At closing, the repurchased securities will be retired and, subject to the Company’s election to repurchase additional securities, the Company’s outstanding securities will be reduced from approximately 28 million to approximately 18 million. At closing, the composition of the Company’s Board of Directors will remain the same.
Additionally, fifteen months after the closing of the repurchase, the Company has the option to purchase all of the remaining securities from Oaktree, and Oaktree has the option to sell all or a portion of its remaining securities to the Company, at a purchase price per security of $6.40 in cash. Such purchase would be subject to the satisfaction of customary closing conditions, including FCC short form approval.
“We appreciate the opportunity to facilitate this significant transaction with Oaktree and are excited about this repurchase, which secures the exit of a very long-term private equity majority shareholder that current and potential shareholders have described to me consistently as being an obstacle to investing more, or establishing a position, in Townsquare given the significant overhang Oaktree’s holding represented,” said Bill Wilson, the Company’s Chief Executive Officer. “This repurchase is immediately accretive to shareholders and we thank our Board of Directors for their vote of confidence in our medium and long-term business plan to grow revenue and profits.”
“Oaktree remains fully supportive of the Company and its prospects,” said David Quick, a Townsquare Board Member since the Company’s inception and Managing Director at Oaktree. “The Oaktree entities that own these shares are selling their interests in the Company because they are now beyond their fund life and are winding down.”
Houlihan Lokey Capital, Inc. served as financial advisor to the Special Committee in connection with the repurchase.
About Townsquare Media, Inc.
Townsquare is a community-focused digital media, digital marketing solutions and radio company focused outside the Top 50 markets in the U.S. Our assets include Townsquare Interactive, a digital marketing services subscription business providing web sites, search engine optimization, social platforms and online reputation management for approximately 22,750 SMBs; Townsquare IGNITE, a proprietary digital programmatic advertising technology with an in-house demand and data management platform; and Townsquare Media, our portfolio of 322 local terrestrial radio stations in 67 cities with corresponding local news and entertainment websites and apps including legendary brands such as WYRK.com, WJON.com, and NJ101.5.com along with a network of national music brands including XXLmag.com, TasteofCountry.com, UltimateClassicRock.com and Loudwire.com For more information, please visit www.townsquaremedia.com, www.townsquareinteractive.com, and www.townsquareignite.com.
Forward Looking Statements
Except for the historical information contained in this Press Release, the matters addressed are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often discuss the Company’s current expectations. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “could,” “would,” “will,” the negatives thereof and other words and terms. The forward-looking statements contained in this Press Release include, but are not limited to, statements related to the consummation of the stock repurchase pursuant to the Stock Purchase Agreement, the timing thereof and the potential exercise of the Company’s option to purchase all of the Sellers’ remaining Securities, or the Sellers’ option to sell all or a portion of their remaining Securities to the Company. By nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements. Forward-looking statements are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements, which speak only as of the date hereof or as of the date specified herein. See “Risk Factors” and “Forward-Looking Statements” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission (the “SEC”) on June 9, 2020, and subsequent filings with the SEC, for a discussion of factors that could cause the Company’s actual results to differ from those expressed or implied by forward-looking statements. The Company assumes no responsibility to update any forward-looking statement as a result of new information, future events or otherwise.
Investor Relations
Claire Yenicay
(203) 900-5555
investors@townsquaremedia.com
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