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DHX Media Ltd
Symbol DHX
Shares Issued 135,004,863
Close 2019-10-09 C$ 2.22
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DHX Media arranges $60-million rights offering

2019-10-09 16:34 ET - News Release

Ms. Nancy Chan-Palmateer reports


DHX Media Ltd. (doing business as WildBrain) is offering rights to eligible holders of its common voting shares and variable voting shares of record at the close of business on Oct. 18, 2019.

Pursuant to the rights offering, each holder of voting shares will receive one right for each voting share held. Every 3.757635354 rights will entitle the holder to subscribe for one whole voting share of the company at a price of $1.67 per voting share.

The company has entered into a standby purchase agreement with Fine Capital Partners LP as investment manager on behalf of certain of the funds it manages whereby Fine Capital has agreed to acquire any voting shares that are not taken up by holders of rights, so that a total of 35,928,144 voting shares will be issued under the rights offering. Pursuant to the standby purchase agreement, and in consideration solely for the standby commitment, the company has agreed to pay to Fine Capital a fee equal to $1.5-million. The standby fee will be paid in cash upon the completion of the rights offering.

WildBrain expects to raise gross proceeds of $60-million from the rights offering and intends to use $50-million of the proceeds to reduce the company's term loan and the remaining $10-million less offering expenses for general working capital purposes. As a result of this debt repayment, the company's net leverage ratio (1) as at June 30, 2019, would be reduced from 5.92 times to approximately 5.40 times on a pro forma basis.

The rights will trade on the Toronto Stock Exchange under the symbol DHX.RT commencing on Oct. 17, 2019, and will cease trading at 12 p.m. Toronto time on Nov. 15, 2019. The ex rights trading date for the voting shares on the Toronto Stock Exchange will be Oct. 17, 2019. The ex rights trading date on the Nasdaq for the value receivable by ineligible shareholders for the rights will be Oct. 17, 2019. This means that voting shares purchased on or following Oct. 17, 2019, will not be entitled to receive rights under the rights offering. The rights will not be listed and posted for trading on the Nasdaq. Rights are exercisable until 5 p.m. Toronto time on Nov. 15, 2019, after which time unexercised rights will be void and of no value. Shareholders must hold at least 3.757635354 voting shares to exercise their rights, as no fractional voting shares will be issued.

The rights offering includes an additional subscription privilege under which eligible holders of rights who fully exercise their rights will be entitled to subscribe for additional voting shares, if available, that are not otherwise subscribed for in the rights offering. Holders exercising their rights will receive common voting shares if they are Canadian (as defined under the Broadcasting Act (Canada)), and variable voting shares if they are non-Canadian.

There are currently 135,004,863 voting shares outstanding. Following completion of the rights offering, WildBrain expects that there will be approximately 170,933,007 voting shares outstanding, on a non-diluted basis.

The rights offering will be conducted only in the provinces and territories of Canada. Accordingly and subject to the detailed provisions of a rights offering circular, rights will not be delivered to, nor will they be exercisable by, persons resident outside of the eligible jurisdictions unless such holders can establish that the transaction is exempt under applicable legislation. Rather, such rights may be sold on their behalf. If you are a holder of common voting shares and reside outside of Canada, please review the company's rights offering notice, circular and notice to ineligible shareholders to determine your eligibility and the process and timing requirements to receive and exercise your rights.

Details of the rights offering will be set out in a notice and circular, which are available under the company's profile on SEDAR. The notice and accompanying rights certificate will be mailed to each eligible shareholder of WildBrain as at the record date. To subscribe, registered shareholders must forward the completed rights certificate, together with the applicable funds, to the depositary and subscription agent, Computershare Investor Services Inc., prior to the expiry time. Shareholders who own their voting shares through an intermediary, such as a bank, trust company, securities dealer or broker, will receive materials and instructions from their intermediary.

(1) The net leverage ratio calculation is based on the definition in the company's senior secured credit agreement available on SEDAR.

About DHX Media Ltd. (doing business as WildBrain)

At WildBrain, it makes great content for kids and families. With over 13,000 half-hours of filmed entertainment in its library -- one of the world's most extensive -- it is home to such brands as Peanuts, Teletubbies, Strawberry Shortcake, Caillou, Inspector Gadget and Degrassi. Its shows are seen in more than 150 countries on over 500 telecasters and streaming platforms. Its AVOD business -- WildBrain Spark -- offers one of the largest networks of kids channels on YouTube, with over 109 million subscribers.

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