Transaction to be Consummated Through
Court-Supervised Process
Company’s Operations Will Continue
Uninterrupted
Global media company iMedia Brands, Inc. (the “Company” or
“iMedia”) (NASDAQ: IMBI, IMBIL) today announced that it has entered
into an asset and equity purchase agreement (the “AEPA”) with an
affiliate of RNN National Media Group (“RNN”), a privately owned
portfolio of independent broadcast assets and production and
distribution capabilities, to sell substantially all of the
Company’s assets, including its ShopHQ Networks, 1-2-3.tv, iMDS,
J.W. Hulme, and Christopher & Banks businesses for
approximately $50 million of transaction value, plus the assumption
of certain liabilities, contracts and ongoing expenses.
The Company intends to effectuate the transaction with RNN
through its ongoing Chapter 11 cases in the U.S. Bankruptcy Court
for the District of Delaware (the “Bankruptcy Court”) pursuant to
Section 363 of the U.S. Bankruptcy Code.
“We are excited to announce this major transaction, which will
provide the company with the platform to grow and build value for
all of our stakeholders,” said James Alt, Chief Transformation
Officer of iMedia. “RNN is the ideal partner to position iMedia for
its next growth phase and we look forward to being a part of RNN’s
suite of broadcast assets and providing our valued customers the
assortment of brands they’re looking for through engaging and
informative content. Our employees, vendors, partners, and hosts
remain our priority as we work together to position the business
for its next chapter."
“Today’s announcement will position iMedia to continue serving
our dedicated customer base as we strive to capitalize on the
convergence of entertainment, ecommerce, and advertising,” said Tim
Peterman, Chief Executive Officer of iMedia. “RNN’s television
platform in the U.S., together with its culture, reputation, and
expertise, provides a strong partner for our company.”
“RNN is excited to acquire iMedia Brands, its assets, and its
talented staff,” said Richard E. French, Jr. President and CEO of
RNN. “As an incredibly important player in the retail space with
strong customer relationships, iMedia is poised for unprecedented
success as part of the RNN portfolio. We look forward to working
with iMedia’s partners to continue providing desirable products to
customers well into the future.”
The proposed transaction, which remains subject to higher or
better offers, will be implemented pursuant to the terms of the
AEPA and is otherwise expected to close in August 2023. The AEPA is
subject to certain customary closing conditions, including approval
of the Bankruptcy Court.
In connection with the proposed transaction, the Bankruptcy
Court approved $15 million in new debtor-in-possession financing
from certain of the Company’s existing secured lenders and RNN. The
new financing, together with cash generated from ongoing
operations, will provide sufficient liquidity to support the
Company’s operations during the sale process. iMedia has also
received the Bankruptcy Court’s approval of a number of customary
motions to continue supporting its operations during the Chapter 11
cases, including the continued payment of employee wages and
benefits and normal programming on its networks without
interruption, and other relief measures customary in Chapter 11
cases.
Additional information regarding the Company’s Chapter 11
process is available at cases.stretto.com/iMediaBrands.
Stakeholders with questions may call the Company’s Claims agent
Stretto at (855) 794 – 3801 (U.S.) or (949) 340 – 0398 (outside the
U.S. or Canada), or email at Teamimedia@stretto.com.
Due to the pending asset sale and related court proceedings, the
Company has suspended its earnings calls and future investor
conference participation. iMedia will use its SEC filings and press
releases for its updates for the foreseeable future.
Ropes & Gray LLP and Pachulski Stang Ziehl & Jones LLP
are serving as legal counsel, Lincoln International LLC is serving
as investment banker, Huron Consulting Group is serving as
financial advisor, and C Street Advisory Group is serving as
strategy and communications advisor to the Company. Fried, Frank,
Harris, Shriver & Jacobson LLP and Morris, Nichols, Arsht &
Tunnell LLP are serving as legal counsel to RNN.
About iMedia Brands, Inc.
iMedia Brands, Inc. (NASDAQ: IMBI, IMBIL) is a global media
company capitalizing on the convergence of entertainment,
ecommerce, and advertising. The Company owns and operates four
television networks, which are ShopHQ, ShopBulldogTV, ShopHQHealth
and 123tv. ShopHQ, the company’s flagship television network with a
thirty-year history, is nationally distributed in the U.S. to over
90 million homes via its affiliation agreements in cable,
satellite, and broadcast, and reach viewers through its social
platforms and its OTT App on Roku, Apple TV, Amazon Fire and
Samsung Smart-televisions.
About RNN
RNN is a privately held portfolio of independent broadcast
assets and production/distribution capabilities headquartered in
Rye, NY. In 1993 RNN was established with a single broadcast
station in New York’s Hudson Valley, reaching less than 250,000
homes. Over the subsequent years, RNN has grown to own the largest
group of independent broadcast stations in the United States
reaching one third of US TV Households and owning ten TV stations
in eight of the top ten television markets. The station group
reaches over 20 million cable and satellite households and over
four million over the air only households.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995
This document contains certain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. Any statements contained herein that are not statements of
historical fact, including statements regarding anticipated timing
of filings with the SEC are forward-looking. The Company often uses
words such as anticipates, believes, estimates, expects, intends,
seeks, predicts, hopes, should, plans, will, or the negative of
these terms and similar expressions to identify forward-looking
statements, although not all forward-looking-statements contain
these words. These statements are based on management's current
expectations and accordingly are subject to uncertainty and changes
in circumstances. Actual results may vary materially from the
expectations contained herein due to various important factors,
including (but not limited to): variability in consumer
preferences, shopping behaviors, spending and debt levels; the
general economic and credit environment, including COVID-19;
interest rates; seasonal variations in consumer purchasing
activities; the ability to achieve the most effective product
category mixes to maximize sales and margin objectives; competitive
pressures on sales and sales promotions; pricing and gross sales
margins; the level of cable and satellite distribution for the
Company’s programming and the associated fees or estimated cost
savings from contract renegotiations; the Company’s ability to
establish and maintain acceptable commercial terms with third-party
vendors and other third parties with whom the Company has
contractual relationships, and to successfully manage key vendor
and shipping relationships and develop key partnerships and
proprietary and exclusive brands; the ability to manage operating
expenses successfully and the Company’s working capital levels; the
ability to remain compliant with the Company’s credit facilities
covenants; customer acceptance of the Company’s branding strategy
and its repositioning as a video commerce Company; the ability to
respond to changes in consumer shopping patterns and preferences,
and changes in technology and consumer viewing patterns; changes to
the Company’s management and information systems infrastructure;
challenges to the Company’s data and information security; changes
in governmental or regulatory requirements; including without
limitation, regulations of the Federal Communications Commission
and Federal Trade
Commission, and adverse outcomes from regulatory proceedings;
litigation or governmental proceedings affecting the Company’s
operations; significant events (including disasters, weather events
or events attracting significant television coverage) that either
cause an interruption of television coverage or that divert
viewership from its programming; disruptions in the Company’s
distribution of its network broadcast to customers; the Company’s
ability to protect its intellectual property rights; the Company’s
ability to obtain and retain key executives and employees; the
Company’s ability to attract new customers and retain existing
customers; changes in shipping costs; expenses related to the
actions of activist or hostile shareholders; the Company’s ability
to offer new or innovative products and customer acceptance of the
same; changes in customer viewing habits of television programming;
logistics costs including the price of gasoline and transportation;
and the risks described from time to time in the Company’s reports
filed with the SEC, including, but not limited to, the Company’s
most recent annual report on Form 10-K, quarterly reports on Form
10-Q, and current reports on Form 8-K. Investors are cautioned not
to place undue reliance on forward-looking statements, which speak
only as of the date of this announcement. The Company is under no
obligation (and expressly disclaims any such obligation) to update
or alter its forward-looking statements whether as a result of new
information, future events or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20230707104809/en/
Investors: Ken Cooper kcooper@imediabrands.com (952)
943-6119 Media: C Street Advisory Group
imedia@thecstreet.com
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