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TORONTO, June 16, 2014 The Intertain Group Limited ("Intertain" or the "Company") (TSX:IT) today announced that it plans to sell, on a "bought deal" basis, $45.5 million of equity subscription receipts ("Equity Subscription Receipts") and $44.5 million in equity-linked debt subscription receipts ("Equity-Linked Debt Subscription Receipts"), led by Canaccord Genuity Corp. and a group of underwriters (the "Underwriters"). The net proceeds from the Offering (as defined below) will be used by Intertain to fund the previously announced acquisition of Mandalay Media Limited (the "Acquisition"). For further details on the Acquisition, see Intertain's press release dated June 4, 2014.
Equity Subscription Receipts
Intertain has entered into an agreement to sell, on a bought deal basis, 6,500,000 Equity Subscription Receipts at a price of $7.00 per Equity Subscription Receipt for gross proceeds of $45.5 million (the "Equity Subscription Receipt Offering"). Each Equity Subscription Receipt will entitle the holder thereof to receive, upon the Acquisition closing, without payment of additional consideration or further action, one equity unit of Intertain (an "Equity Unit") in exchange for each Equity Subscription Receipt. Each Equity Unit will consist of one common share of Intertain ("Common Share") and one quarter of one warrant (each a "Warrant"). Each Warrant entitles the holder thereof to acquire one Common Share for an exercise price of $7.75 per Common Share for a period of two years following the closing date.
The Equity Subscription Receipts will be issued pursuant to a subscription receipt agreement (the "Subscription Receipt Agreement"). Pursuant to the Subscription Receipt Agreement, the proceeds of the Subscription Receipt Offering, net of 50% of the underwriters' fee payable in connection therewith, will be held in escrow pending delivery of notice of the closing of the Acquisition. If: (i) the Acquisition closing does not occur prior to 5:00 p.m. (Toronto time) on August 31,
2014; (ii) the Acquisition share purchase agreement ("Share Purchase Agreement") is terminated at an earlier time; or (iii) Intertain advises the subscription receipt agent and Canaccord Genuity Corp., or announces to the public, that it does not intend to proceed with the Acquisition, the subscription receipt agent and Intertain will return to holders of Equity Subscription Receipts an amount per Equity Subscription Receipt equal to the offering price plus a pro rata share of the interest earned on the escrowed funds, net of any applicable withholding taxes.
Equity Linked Debt Subscription Receipts
Intertain has entered into an agreement to sell, on a bought deal basis, 44,500 Equity-Linked Debt Subscription Receipts at a price of $1,000 per Equity-Linked Debt Subscription Receipt for gross proceeds of $44.5 million (the "Equity-Linked Debt Subscription Receipt Offering", together with the Equity Subscription Receipt Offering, the "Offering"). Each Equity-Linked Debt Subscription Receipt will entitle the holder thereof to receive, upon the Acquisition closing, without payment of additional consideration or further action, one debenture unit of Intertain (an "Equity-Linked Debenture Unit") in exchange for each Equity-Linked Debt Subscription Receipt. Each Equity-Linked Debenture Unit will consist of one $1,000 debenture of Intertain (a "Debenture") and 40 Warrants.
The Debentures will be senior secured obligations of Intertain and will have an interest rate of 8.500% per annum payable semi-annually in arrears on the last day of June and December in each year commencing December 31, 2014. The Debentures will have a maturity of June 30, 2019.
The Equity-Linked Debt Subscription Receipts will be issued pursuant to the Subscription Receipt Agreement. Pursuant to the Subscription Receipt Agreement, the proceeds of the Subscription Receipt Offering, net of 50% of the underwriters' fee payable in connection therewith, will be held in escrow pending delivery of notice of the closing of the Acquisition. If: (i) the Acquisition closing does not occur prior to 5:00 p.m. (Toronto time) on August 31, 2014; (ii) the Acquisition Share Purchase Agreement is terminated at an earlier time; or (iii) Intertain advises the subscription receipt agent and Canaccord Genuity Corp., or announces to the public, that it does not intend to proceed with the Acquisition, the subscription receipt agent and Intertain will return to holders of Equity-Linked Debt Subscription Receipts an amount per Equity-Linked Debt Subscription Receipt equal to the offering price plus a pro rata share of the interest earned on the escrowed funds, net of any applicable withholding taxes.
Closing of Offerings
Intertain will file a short form prospectus qualifying the issuance of the Equity Subscription Receipts and the Equity-Linked Debt Subscription Receipts in the provinces of Alberta, British Columbia, Ontario and Quebec pursuant to National Instrument 44-101 – Short Form Prospectus Distributions. The Offering is expected to close on or about July 3, 2014 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange.
Intertain has granted the Underwriters an option to purchase to an additional 975,000 Equity Subscription Receipts, representing additional gross proceeds of $6,825,000 on the same terms as the Equity Subscription Receipt Offering, and 6,675 Equity-Linked Debt Subscription Receipts, representing additional gross proceeds of $6,675,000 on the same terms as the Equity-Linked Debt Subscription Receipt Offering (each option, an "Over-Allotment Option"). The Over-Allotment Options are exercisable at any time up to 30 days following the date of the closing of the Offering.
About The Intertain Group Limited
Intertain, through its subsidiary, CryptoLogic Operations Limited, is an online gaming company, which provides entertainment to a global consumer base. Intertain currently offers casino and poker games to its customers using the InterCasino and InterPoker brands. Licensed in Malta, InterCasino is one of the longest running online casino in the world and was launched in 1996. The site provides a large variety of the most popular and well-known casino games and slot machines titles in an online format. The InterCasino gaming platform is supplied by Amaya Gaming Group Inc. (AYA:TSX) and the Costa Bingo site of Mandalay Media Limited operates off of the Dragonfish platform, a leading bingo software service provided by 888 Holdings plc (888:LSE).
There can be no assurance that the Acquisition will close or that the financing will be completed in whole or in part or the timing of any such transaction. Information in this press release that is not current or historical factual information may constitute forward-looking information, including future-oriented financial information and financial outlooks, within the meaning of securities laws, related to the timing and completion of the Acquisition (including the financing thereof) and the anticipated benefits of such acquisition, including the timing and value of revenue and earnings growth potential. This information is based on certain assumptions regarding expected growth, results of operations, performance, and business prospects and opportunities. While the Company considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. Forward-looking information is subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from what the Company currently expects. These risks, uncertainties and other factors include, but are not limited to: credit, market, currency, operational, liquidity and funding risks, including changes in economic conditions, interest rates or tax rates, limited operating history, the heavily regulated industry, competition issues, the possibility that the Company be unable to complete the Acquisition and integrate Mandalay Media Limited's business successfully, the impact of change in regulations or industry standards, international operations and risks of foreign operations, the Company's capital structure, funding strategy, share price and the Company's ability to protect its intellectual property. Except as required by law, the Company does not intend, and undertakes no obligation, to update any forward-looking statements to reflect, in particular, new information or future events.
SOURCE: The Intertain Group Limited
For further information: Rob Chalmers, [email protected], 1.647.402.7552