AMC Networks to Acquire RLJ Entertainment

AMC Networks has moved in to acquire RLJ Entertainment, which operates OTT channels such as Acorn TV and Urban Movie Channel (UMC).

AMC Networks is proposing to acquire the outstanding shares of RLJ Entertainment not currently owned by AMC Networks or entities affiliated with Robert L. Johnson for a purchase price of $4.25 per share in cash. This puts it at a value of around $60 million.

RLJ Entertainment is a digital channel company that serves distinct audiences primarily through its OTT branded services, including the British-focused Acorn TV and urban-targeted UMC. Through this offer, AMC Networks intends for RLJ Entertainment to become a privately owned subsidiary of AMC Networks, with a minority stake held by Johnson.

In October 2016, AMC Networks and RLJ Entertainment formed a strategic partnership, which saw AMC Networks investing $65 million in RLJ Entertainment in the form of loans—loans have subsequently been increased to an aggregate of $78 million—and AMC Networks received warrants which, if fully exercised, would provide AMC Networks with at least 50.1 percent of the outstanding RLJ Entertainment common stock on a fully diluted basis. AMC and Johnson currently own approximately 26 percent and 47 percent of the outstanding shares of RLJ Entertainment common stock, respectively.

AMC Networks expects the board of directors of RLJ Entertainment to form a special committee of independent directors to consider the proposal with the assistance of an outside financial advisor and legal counsel and to negotiate the proposal with RLJ Entertainment. Johnson and the directors of RLJ Entertainment nominated by AMC Networks will not participate in the evaluation of the proposal.