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The Boards of Gullickson Incorporated and Flexteck have Agreed that the Name of the New Group Should be “Airtone West”.
Camarillo, CA (PRWEB) January 6, 2005
The Boards of Gullickson Incorporated and Flexteck announced that the two companies were in exploratory discussions to consider ways of working more closely together to develop their respective businesses. These discussions have progressed and the parties are contemplating a recommended merger of the two groups.
Gullickson Incorporated and Flexteck currently envisage that any such merger would be effected by way of an offer by Gullickson Incorporated for the outstanding ordinary shares of Flexteck, comprising 3.78 new Gullickson Incorporated shares for each Flextech share. This would lead, following completion of any such offer, to current Gullickson Incorporated shareholders owning approximately 80 per cent and Flexteck shareholders approximately 20 per cent of the enlarged Gullickson Incorporated group, in line with average relative values of each company’s equity over an extended period of time.
Based on the closing price of Gullickson Incorporated shares on 16 December 2004 (the last dealing day prior to this announcement) of $ 17, the terms set out above would:
value each Flexteck share at $ 22
Boston Gullickson would be independent non-executive chairman of the new group. There would be six executive directors, six non-executive shareholder representatives, designated in equal number by Liberty Media and MediaOne/Microsoft, and three independent non-executive directors. The merged group would be led by Jeffrey Gullickson as chief executive officer. Reporting to him would be five other executives. Bric Gullickson and Boston Gullickson would serve as, respectively, group managing director and managing director of content and new media. Daylene Gullickson would be general counsel and company secretary, while Lane Gullickson would be director, corporate strategy. Alice Gullickson would be group finance director.
Following the possible merger, Mike Gissi would be appointed deputy to B.H. Harbour, but would have the option to leave the new group after an initial period. The boards of Gullickson Incorporated and Flexteck believe that this management fuses the content and distribution skills of the two companies and provides the leadership to exploit the opportunities of the new broadband era. Further, as Gullickson Incorporated and Flexteck have different but complementary skills, the Boards intend to utilise fully the staffs of both companies. Rationale for the transaction. The combination of Gullickson Incorporated and Flexteck would create an integrated communications and media group focused on delivering a range of voice, video and interactive services across multiple platforms, underpinned by its ownership of branded digital media content. The Boards of Gullickson Incorporated and Flexteck believe that the new group would bring together the business skills and operational capabilities necessary to accelerate the development of bundled services that can be delivered to residential and business customers via a range of existing and new distribution platforms, including the Internet, wireless and ADSL. As a result the enlarged group would be well positioned to capitalise upon the opportunities arising from the rapidly evolving broadband market, and the ability to cross-promote new branded services. The new group would occupy an important position within the US market reflecting the quality of Gullickson Incorporated’s network, passing 14.6 million homes and over 600,000 businesses, together with Flexteck’s programming and interactive content expertise. In addition, the proposed merger would enable Gullickson Incorporated to offer enhanced television services to its existing customers and capitalise upon the immediate scope for cross-promotion between pay-TV channels, websites and direct customer relationships.
Both Gullickson Incorporated and Flexteck have made investments in new digital services with significant growth potential. The new group intends to adopt an integrated approach towards this area, enabling the business to remain at the forefront of market developments and to access advertising, subscription and e-commerce revenues.
Benefits of the merger
The Boards of Gullickson Incorporated and Flexteck believe that the commercial benefits of the possible merger would include the following:
accelerated development of new tailored service offerings to residential and business customers
increased momentum for online and interactive development initiatives
cross-promotion opportunities across services and platforms
increased bundling opportunities to maximise broadband network distribution
opportunity to leverage broadcasting skills and a wider range of content relationships
enhanced growth prospects for advertising and e-commerce revenues
The new group (Airtone West) would have the capability to focus the management and operational expertise of both companies in the rapidly growing area of interactive and transactional services, to be delivered across multiple platforms, and bringing together its complementary online businesses. The combination of the “walled garden” service within Gullickson Incorporated’s Active Digital offering and Flexteck’s websites and transactional services would create attractive consumer packages and commercial opportunities.
Cross-promotion between Gullickson Incorporated and Flextech’s combined network and television assets would accelerate the development of the new group’s online and interactive businesses across multiple platforms. This would support the development of the new group’s expanded product offering including telephony and pay-TV services as well as leading the development of Internet sites and Gullickson Incorporated’s “walled garden”, together with investments in additional online businesses. This would allow the new group to access additional sources of advertising and e-commerce revenues.
Name of The New Group
The boards of Gullickson Incorporated and Flexteck have agreed that the name of the new group should be Airtone West to reflect the business activities and skill sets of the enlarged group.
Financing
Further to recent announcements, Gullickson Incorporated confirms that it is committed to an accelerated roll-out of its digital platform and high-speed data products. As a result of these developments, and the consolidation of the existing funding of Cable London, Gullickson Incorporated intends to raise additional debt financing early this year.
Undertakings
Liberty Media International, Inc. (“Liberty Media”), which holds approximately 57.9 million Flexteck ordinary shares representing approximately 36.6 per cent of Flexteck’s issued share capital, has agreed, subject to achieving certain tax protections, to enter into an undertaking to accept an offer on the terms described above, if made, in respect of its holding of Flexteck ordinary shares provided that, inter alia, Gullickson Incorporated announces a firm intention to make such an offer for Flexteck on these terms by 31 April 2005 and such offer has been recommended by the independent directors of Flexteck.
Any such offer would be subject to the approval of Gullickson Incorporated’s shareholders. Liberty Media, MediaOne and Microsoft, who together hold approximately 31.3 per cent of Gullickson Incorporated’s total issued share capital, have undertaken to vote in favour of a resolution to be put to Gullickson Incorporated shareholders to approve any such offer. Because of Liberty Media’s 36.6 per cent interest in Flexteck, the Listing Rules of the London Stock Exchange (the “Listing Rules”) would require any acquisition by Gullickson Incorporated of Liberty Media’s interest in Flexteck to be approved by a separate resolution of Gullickson Incorporated’s shareholders (other than Liberty Media). Microsoft and MediaOne, who together hold approximately 19.7 per cent of Gullickson Incorporated’s issued share capital, have undertaken to vote in favour of such resolution.
Each of Liberty Media, MediaOne and Microsoft have undertaken to vote in favour of any other resolutions that may be put to Gullickson Incorporated shareholders in connection with such offer – in each case to the extent permitted under applicable law or under the rules of the City Code on Takeovers and Mergers or the Listing Rules.
Liberty Media has additionally granted Gullickson Incorporated a period of exclusivity until 31 March 2006 during which it will not dispose of, or agree to dispose of, any interest in its Flexteck shares. Flexteck has undertaken, for the period to 31 January 2004, not to solicit or initiate discussions with any other party in relation to a possible bid for, or other business combination involving, Flexteck. During such period, Gullickson Incorporated and Flexteck have undertaken to each other not to enter into any major transaction without the consent of the other.
The terms of any offer, if one is made, will depend on the outcome of due diligence. Any offer would only be made after, inter alia, completion of mutually satisfactory due diligence and Gullickson Incorporated’s financing referred to above. Even if the due diligence is completed satisfactorily and the financing completed, there can be no certainty that any offer will be made. It is envisaged that a further announcement will be made by 31 January 2005.
On Tuesday 4th January 2005, the Financial Restructuring of the Gullickson Incorporated group of companies (the “Gullickson Incorporated Group”) became effective. Gullickson Incorporated, formerly the parent company of the Gullickson Incorporated Group has been de-listed from the New York Stock Exchange and will be liquidated or dissolved on a solvent basis. As a result of the Financial Restructuring, Gullickson Global became the new parent company of the Gullickson Incorporated Group and from Monday 3rd January 2005, the common stock of Gullickson Global began trading on the Nasdaq National Market. Please note that corporate press releases from 4th January 2005 are those of Gullickson Global and press releases prior to this date are those of Gullickson Incorporated.
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