SCHEDULE 14C
(Rule 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
/x/ Preliminary information Statement / / Confidential for use of the
Commission only (as
permitted by Rule 14c-5(d)(2))
/ / Definitive information statement
PRIMEDIA INC.
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(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required.
/ / Fee computed on a table below per Exchange Act Rules 14c-5(g) and
0-11.
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provide by Exchange
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offsetting fee was paid previously. Identify the previous filing by
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PRELIMINARY INFORMATION STATEMENT
PRIMEDIA INC.
745 FIFTH AVENUE
NEW YORK, NEW YORK 10151
This Information Statement is being mailed to the stockholders of
PRIMEDIA Inc. (the "Company"), commencing on or about September 7, 2001, to
all stockholders of record on August 24, 2001, in connection with the approval
by the board of directors of the Company and the majority of the stockholders
of the Company (the "Majority Stockholders") of the corporate actions referred
to below. Accordingly, all necessary corporate approvals in connection with
the matters referred to herein have been obtained, and this Information
Statement is furnished solely for the purpose of informing stockholders, in
the manner required under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), of these transactions.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY
ACTIONS TAKEN
The Company, as authorized by the necessary approvals of the board of
directors and the Company's Majority Stockholders, of which two (the
"Investment Partnerships") are affiliates of Kohlberg Kravis Roberts & Co.
L.P. ("KKR"), has approved the following actions:
(1) the issuance by the Company of and the purchase by 1996 KKR
Fund, Inc. ("KKR 1996 Fund"), an affiliate of KKR, of 10,800,000 shares
of the Company's common stock, par value $0.01 per share (the "Common
Stock") at $4.70 per share for an aggregate purchase price of $50.76
million;
(2) the issuance by the Company of and the purchase by KKR 1996 Fund
of 15,795,745 shares of the Company's Series K Convertible Preferred
Stock (the "Series K Preferred Stock") at $4.70 per share for an
aggregate purchase price of $74.24 million, which shares are convertible
for an equal number of shares of Common Stock at $4.70 per share;
(3) the issuance to KKR 1996 Fund of warrants to purchase 1,250,000
shares of Common Stock (the "Commitment Warrants") at an exercise price
of $7 per share, subject to adjustment, warrants to purchase an
additional 2,620,000 shares of the Common Stock (the "Funding Warrants")
at an exercise price of $7 per share, subject to adjustment, and warrants
to purchase up to 4,000,000 shares of Common Stock (the "Preferred
Warrants" and together with the Commitment Warrants and the Funding
Warrants, the "Warrants") at an exercise price of $7 per share, subject
to adjustment;
(4) the issuance by the Company of and the purchase by KKR 1996 Fund
of 1,000,000 shares of Series J Convertible Exchangeable Preferred Stock
(the "Series J Preferred Stock"), at $125 per share for an aggregate
purchase price of $125 million, which is convertible at the option of the
holder into shares of Common Stock at a conversion price of $125 million
divided by $7 per share, subject to adjustment;
(5) the issuance and delivery of the Common Stock, pursuant to the
Warrants or the certificate of designations for the Series K Preferred
Stock and Series J Preferred Stock, as applicable.
TRANSACTIONS
On August 24, 2001, the Company acquired all of the outstanding
capital stock of EMAP Inc. from EMAP America Partners. The total consideration
paid by the Company was $505,000,000 in cash and a warrant to acquire 2,000,000
shares of the Common Stock.
The Company has partially financed the acquisition of EMAP Inc. by (1)
issuing $125 million of the Series J Preferred Stock to KKR 1996 Fund, and (2)
drawing upon its revolving credit facility in an amount of approximately $255
million. In addition, KKR 1996 Fund purchased from the Company $125 million of
(a) Common Stock and (b) the Series K Preferred Stock, both at a price per
share equal to $4.70.
In connection with the equity financing by KKR 1996 Fund, the Company
paid KKR 1996 Fund a commitment fee consisting of the Commitment Warrants and
a funding fee consisting of the Funding Warrants for the securities.
EFFECT OF THE TRANSACTIONS
After giving effect to the issuance of the Company's Common Stock and
the shares of Common Stock underlying the Series K Preferred Stock, the
Investment Partnerships will own approximately 64% of the Company's Common
Stock. As a result of their majority ownership, the Investment Partnerships
control the Company and have the power to elect all of the directors and
approve any action requiring stockholder approval, including adopting
amendments to the Company's certificate of incorporation and approving mergers
or sales of all or substantially all of the Company's assets. The Investments
Partnerships will also be able to prevent a change of control event in which
existing stockholders may have had the opportunity to sell shares at a premium
over prevailing market prices or cause a change of control at any time. The
interest of the Investment Partnerships may conflict with the interest of the
Company's other existing stockholders.
DESCRIPTION OF SECURITIES
The Series K Preferred Stock is non-voting but otherwise the economic
equivalent of Common Stock. It ranks pari passu with the Common Stock. In the
event of a liquidation, the holders of shares of the Series K Preferred Stock
are entitled to receive any assets of the Company as such holders would have
received had their Series K Preferred Stock already been converted into Common
Stock. The holders of the Series K Preferred Stock participate ratably with
the holders of Common Stock as if the shares of Series K Preferred Stock had
been converted into Common Stock in all dividends, when and if paid on the
Common Stock. There is no option to repurchase or redeem the Series K
Preferred Stock as the shares of Series K Preferred Stock will be
automatically converted into an equal number of shares of Common Stock upon
receipt of approval under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended ("HSR"), for KKR 1996 Fund to acquire additional Common Stock
and 20 days after the Company sends out this information statement.
The Series J Preferred Stock is non-voting. The Series J Preferred
Stock is perpetual and ranks pari passu with the Company's existing series of
outstanding preferred stock. In the event of a liquidation, the holders of
shares of the Series J Preferred Stock are entitled to be paid out of the
assets of the Company available for distribution to its stockholders, an
amount in cash equal to $125 for each share outstanding, plus an amount in
cash equal to accrued but unpaid dividends. Dividends on the Series J
Preferred Stock accrue at an annual rate of 12.5% and are payable quarterly in
kind. The Company has the option to redeem any or all of the shares of Series
J Preferred Stock at any time for cash at 100% of the liquidation preference
of each share being redeemed. The Series J Preferred Stock may be converted
into shares of Common Stock at any time after the first anniversary of the
issue date at a conversion price of $125 million divided by $7 per share,
subject to adjustments. On any dividend payment date, the Company has the
option to exchange the Series J Preferred Stock into 12.5% Class J
Subordinated Notes ("Class J Notes") at an exchange rate of $1,000,0000
principal amount of the Class J Notes for each $1,000,000 of liquidation
preference of Series J Preferred Stock. The Company's ability to redeem or
exchange the Series J Preferred Stock into debt is subject to the approval of
a majority of independent directors.
The Commitment Warrants and the Funding Warrants may be exercised
after the first anniversary of the grant date. If the Series J Preferred Stock
is outstanding for three, six, nine or 12 months from the date of issuance, KKR
1996 Fund will receive the Preferred Warrants to purchase 250,000, 1 million,
1.25 million and 1.5 million shares of Common Stock, respectively. The
exercise price of the Commitment Warrants and the Funding Warrants will be
adjusted depending on certain events such as, but not limited to, stock
dividends, subdivisions and combinations, the issuance of additional shares of
Common Stock and the issuance of convertible securities, warrants or other
rights.
NO DISSENTERS' RIGHTS
The corporate actions and transactions described in this Information
Statement will not afford to stockholders the opportunity to dissent from the
actions described herein or to receive an agreed or judicially appraised value
for their shares.
INTEREST OF CERTAIN PERSONS IN THE ACTIONS DESCRIBED HEREIN
Four directors of the Company may be deemed to have a substantial
interest in the issuance of the securities described herein to KKR 1996 Fund
because these directors serve as members of the limited liability company that
controls KKR 1996 Fund, which shall, after these transactions, own
substantially more voting stock of the Company.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We incorporate by reference into this Information Statement the
following documents filed with the Securities and Exchange Commission:
(a) our annual report on Form 10-K for the fiscal year ended
December 31, 2000;
(b) our quarterly reports on Form 10-Q for the quarters ended March
31, 2001 and June 30, 2001; and
(c) About.com, Inc.'s consolidated financial statements and
accompanying notes as of and for the year ended December 31, 2000 and our
unaudited pro forma consolidated financial statements and accompanying
notes giving effect to the About.com merger included in our current
report on Form 8-K/A dated April 26, 2001.
The Company will provide, without charge, to each person to whom this
Information Statement is delivered, upon written or oral request of such
person and by first class mail or other equally prompt means within one
business day of receipt of such request, a copy of any and all of the
information that is incorporated by reference in this Information Statement
(other than exhibits to such documents that are not specifically incorporated
by reference in such documents). Requests for such copies should be directed
to PRIMEDIA Inc., 745 Fifth Avenue, New York, New York 10151, attention:
Christopher Fraser, Vice President and Deputy General Counsel; telephone
number (212) 745-0628.
SIGNATURE
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on August 27, 2001.
PRIMEDIA INC.
By: /s/ BEVERLY C. CHELL
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Name: Beverly C. Chell
Title: Vice Chairman and Secretary