0000950142-01-500436.txt : 20011009
0000950142-01-500436.hdr.sgml : 20011009
ACCESSION NUMBER: 0000950142-01-500436
CONFORMED SUBMISSION TYPE: DEFA14A
PUBLIC DOCUMENT COUNT: 1
FILED AS OF DATE: 20010921
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: METROMEDIA INTERNATIONAL GROUP INC
CENTRAL INDEX KEY: 0000039547
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812]
IRS NUMBER: 580971455
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: DEFA14A
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-05706
FILM NUMBER: 1742024
BUSINESS ADDRESS:
STREET 1: ONE MEADOWLANDS PLZ
STREET 2: STE 2210
CITY: EAST RUTHERFORD
STATE: NJ
ZIP: 07073
BUSINESS PHONE: 4042616190
MAIL ADDRESS:
STREET 1: ONE MEADOWLANDS PLAZA
CITY: EAST RUTHERFORD
STATE: NJ
ZIP: 07073
FORMER COMPANY:
FORMER CONFORMED NAME: ACTAVA GROUP INC
DATE OF NAME CHANGE: 19930723
FORMER COMPANY:
FORMER CONFORMED NAME: FUQUA INDUSTRIES INC /DE/
DATE OF NAME CHANGE: 19920703
DEFA14A
1
defa14a.txt
DEFINITIVE ADDITIONAL MATERIALS
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e) (2))
[_] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-12
METROMEDIA INTERNATIONAL GROUP, INC.
------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11. N/A
(1) Title of each class of securities to which
transaction applies: N/A
(2) Aggregate number of securities to which transaction
applies: N/A
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
[METROMEDIA INTERNATIONAL GROUP, INC. LETTERHEAD]
September 21, 2001
Dear Stockholder:
Your Board of Directors is sending you the enclosed WHITE
proxy card in connection with the 2001 Annual Meeting of Stockholders of
Metromedia International Group, Inc. At the Annual Meeting, you will be asked to
consider and vote upon the election of three Class III directors to serve for
three-year terms. Your Board of Directors recommends that you vote to re-elect
John S. Chalsty, Clark A. Johnson and Silvia Kessel.
o Mr. Chalsty is an independent director with broad financial and
business expertise, including serving as President, Chief Executive
Officer and Chairman of Donaldson, Lufkin & Jenrette, Inc. during his
30-year career at that firm.
o Mr. Johnson is an independent director who served for 10 years as Chief
Executive Officer of Pier 1 Imports, a NYSE-listed company, and brings
extensive management experience and business acumen to your Board of
Directors.
o Ms. Kessel has been a director and an executive officer of the company
since 1995. Ms. Kessel has extensive knowledge in corporate financial
matters and has years of experience in the telecommunications industry.
Ms. Kessel's knowledge and experience allow her to play a key role as
an information conduit between management and your Board of Directors,
and to assist your Board to make informed decisions in the best
interest of stockholders.
News Corporation, our largest unaffiliated stockholder, has
informed us that it has decided to vote its shares in support of your Board's
nominees and in accordance with your Board's recommendations on the other
matters to be considered at the Annual Meeting.
CAUTION!
You may have received a letter and proxy statement from
Elliott Associates, L.P. and Elliott International, L.P. (together, the "Elliott
Group") and their well-compensated advisors, Lens Investment Management, LLC
("Lens"). The Elliott Group is threatening a disruptive and costly proxy contest
at the Annual Meeting by seeking to elect two principals of Lens to your Board
of Directors.
DO NOT VOTE IN FAVOR OF THE ELLIOTT GROUP'S NOMINEES!
YOUR BOARD IS ACTIVELY PURSUING A STRATEGY DESIGNED TO
MAXIMIZE VALUE FOR ALL METROMEDIA INTERNATIONAL GROUP
STOCKHOLDERS.
Your Board of Directors, with the assistance of Salomon Smith
Barney and ING Barings, both prominent, internationally-recognized investment
banking firms, has conducted a detailed financial analysis of the company and is
currently evaluating a variety of strategic alternatives, including possible
sales of assets, spin-offs and other transactions to determine whether any of
those alternatives will maximize your investment in Metromedia International
Group. These transactions are very complicated and involve sensitive
negotiations with a number of constituencies, including our lenders, noteholders
and preferred stockholders. Your Board believes that many of the Elliott Group's
proposals are, in contrast, overly simplistic schemes that may benefit the
Elliott Group and their well-compensated advisors at Lens. We will not proceed
with any transactions that we believe are not in the best interests of all our
stockholders. IT IS YOUR BOARD'S RESOLVE TO MAXIMIZE LONG-TERM VALUE FOR ALL
STOCKHOLDERS.
The interests of all our stockholders will be best served if
our nominees are re-elected and given the opportunity to continue to assist us
in carefully designing and executing strategy to maximize stockholder value. We
ask you to support your Board by returning the enclosed WHITE proxy card today
and discarding any blue proxy card sent to you by the Elliott Group. If you have
already returned a blue proxy card sent to you by the Elliott Group, you can
have the Elliott Group proxy revoked by returning a later dated WHITE proxy
card.
DO NOT BE MISLED BY THE ELLIOTT GROUP!
As you review our proxy statement, consider the following:
YOUR BOARD OF DIRECTORS IS FOCUSED ON MAXIMIZING THE VALUE OF
YOUR SHARES. Your Board is actively pursuing a strategy designed to maximize the
value of the company for all of its stockholders and has retained Salomon Smith
Barney and ING Barings to assist in this process. We originally announced our
intention to explore ways to separate Snapper, Metromedia China and our eastern
European radio and cable businesses from our Russian and eastern European
telephony businesses long before the Elliott Group commenced its disruptive and
costly campaign. As we continue to evaluate strategic alternatives, we will
pursue a strategy of increasing profitability and maximizing stockholder value.
The process of finalizing a restructuring transaction involves
negotiating with our lenders, our noteholders, our preferred stockholders and
other constituencies. Given the complexity of these negotiations and the number
of parties involved, we have not yet been able to finalize a restructuring plan.
We regret that this process has taken as long as it has, but we urge you to not
let the Elliott Group's tactics disrupt this process that we have undertaken for
the benefit of all stockholders!
YOUR BOARD OF DIRECTORS IS FOCUSED ON BUILDING THE LONG-TERM
VALUE OF THE COMPANY'S ASSETS. Your Board recognizes and understands the value
of the company's assets and is working diligently to maximize stockholder value.
For example, during fiscal 2000, the company sold its 22% interest in Baltcom
GSM, a joint venture
that provides cellular services in Latvia, for $66 million in cash. The company
will continue to work to maximize the value of its assets in this manner.
By contrast and as their proxy materials demonstrate, the
Elliott Group has executed hundreds of trades in the company's common stock and
in other complicated derivative security positions, even selling significant
blocks of common stock while they were issuing self-serving press releases!
WHO EXACTLY IS THE ELLIOTT GROUP AND WHAT IS THEIR LONG-TERM
INTENT WITH YOUR company? We believe that they are only interested in a
short-term profit at the expense of our long-term stockholders (indeed, some of
their purchases and sales from day to day involved profits as small as $.12 per
share!). The Elliott Group's well-compensated advisors at Lens had no economic
interest in our company until they were hired by the Elliott Group in an attempt
to force your Board to take reckless and ill-advised actions that would harm the
company's long-term value and prospects.
YOUR BOARD OF DIRECTORS IS CAREFULLY STUDYING PLANS TO SPIN
OFF OR SELL NON-CORE ASSETS. Despite what the Elliott Group's proxy materials
would have you believe, since 1995 the company has consistently maintained that
Snapper is a non-strategic asset. Generally accepted accounting principles
require the company not to classify Snapper's results of operations as an "asset
held for sale" because Snapper was not sold in the required time period.
Your Board continues to seek to either spin off or sell the
Snapper business. However, it is absolutely essential that we return that
business to profitability and demonstrate consistent growth in order to maximize
its value. Your Board will not simply "give away" Snapper. So far, the
acquisition proposals that we have received do not reflect the intrinsic value
of that business. The Elliott Group, on the other hand, suggests that the
company dispose of Snapper immediately regardless of the price. Is this a
prudent way to run a business or further evidence of their short-term trading
approach? The Elliott Group's tactics, if successful, will force us to dispose
of this valuable business at fire-sale prices.
YOUR BOARD OF DIRECTORS BELIEVES THAT THE ELLIOTT GROUP'S
PROPOSED STOCK BUY-BACK IS NAIVE AND WOULD HARM THE COMPANY. The Elliott Group
is attempting to force the company to buy back shares of its common stock. Your
Board strongly disagrees with this approach for the following reasons.
o First, the company needs its cash resources to build its existing
telecommunications investments and maximize the long-term value of
those assets.
o Second, the covenants in the company's high-yield note indenture
prohibit it from engaging in a stock buy-back program and any attempt
to negotiate a waiver of those covenants is certain to result in the
company being required to pay a substantial consent fee to its
noteholders -- a waste of even more of our limited cash resources!
o Third, a stock buy-back would reduce the public float of the company's
common stock harming both our stockholders' liquidity and our chances
of obtaining coverage from Wall Street analysts.
THE ELLIOTT GROUP'S CRITICISMS OF OUR FINANCIAL REPORTING ARE
UNFOUNDED. The Elliott Group claims that our structure is "complex" and that our
financial reporting is "unclear." These assertions again demonstrate the Elliott
Group's lack of experience with how business is conducted in the parts of the
world in which the company operates. As investors familiar with our industry
know, when doing business in Eastern Europe and Russia, it is a common and
necessary practice to enter into joint ventures with local partners. These local
partners are often vital to the overall success of the venture as they bring
local expertise and knowledge and contribute infrastructure and technological
assets, and are also required by the laws of many countries in which we do
business.
Generally accepted accounting principles and our outside
auditors require us to account for these joint ventures in the manner presented
in our financial statements -- we are not allowed to consolidate these joint
ventures in spite of what the Elliott Group may want. The lack of accounting
consolidation, however, does not make these ventures any less valuable. For
example, the sale of our interest in the Baltcom GSM venture as described above
realized $66 million and we recorded a gain in connection with this transaction
of $57 million.
Would the Elliott Group have suggested that we not make this
investment because it was not consolidated for financial statement purposes? Is
this the type of leadership you want on your Board? The Elliott Group's
criticism clearly demonstrates their lack of familiarity with our industry or
even basic accounting principles.
THE ELLIOTT GROUP'S NOMINEES LACK EXPERIENCE IN THE
TELECOMMUNICATIONS INDUSTRY. The two nominees proposed by the Elliott Group do
not have any significant experience in the industry in which the company
operates, but rather are specialists in provoking disruptive and costly proxy
contests, which are more often than not, as in this case, unwarranted. As the
Elliott Group discloses in their own proxy materials, the nominees from Lens
have no relevant experience in the industries in which the company operates or
in the parts of the world in which the company's assets are located. They are
also being well compensated by the Elliott Group, including receiving an option
to purchase 300,000 shares of common stock at a $3.00 strike price.
THE ELLIOTT GROUP'S ASSERTION THAT JOHN KLUGE AND STUART
SUBOTNICK PLAN TO TAKE THE COMPANY PRIVATE ARE UNFOUNDED AND IRRESPONSIBLE. Mr.
Subotnick has clearly stated on numerous occasions, including in a recent letter
to the editor published in BARRON'S, that he and Mr. Kluge have no intention of
taking the company private. The Elliott Group is merely using scare-mongering
tactics to disrupt the company's restructuring negotiations and your Board of
Directors' efforts to maximize stockholder value.
ASK YOURSELF IF THE ELLIOTT GROUP AND LENS ARE LOOKING OUT
FOR YOUR BEST INTERESTS - OR THEIR OWN?
WE BELIEVE YOUR CHOICE IS CLEAR.
o It is vital that Metromedia International Group continue to have in
place a Board of Directors that understands the company and will act in
the best interests of all stockholders.
o Your Board believes that its nominees, and not the Elliott Group's
nominees, are in the best position to help the company evaluate its
strategic alternatives, to decide on a course of action that is in the
best interests of all stockholders, and to implement that course of
action.
o News Corporation, our largest unaffiliated stockholder, has informed
your Board that it has reviewed the company's proxy statement and the
issues raised by the Elliott Group and has decided to vote its shares
in support of your Board's nominees. News Corporation has also informed
your Board that it supports the direction that current management is
taking the company and, therefore, News Corporation will vote its
shares in accordance with your Board's recommendations.
WE URGE YOU NOT TO ALLOW THE ELLIOTT GROUP'S TACTICS TO
DISRUPT OR DICTATE THE FUTURE OF THE COMPANY AND YOUR INVESTMENT. YOUR BOARD
RECOMMENDS THAT YOU VOTE THE WHITE PROXY CARD FOR ITS SLATE OF CANDIDATES FOR
THE BOARD OF DIRECTORS.
We deeply regret that a disruptive proxy contest is being
forced upon you at a time when the company's collective energies should be
devoted toward maximizing value for all our stockholders. We believe your
interests will be best served by electing the nominees of your Board of
Directors. PLEASE SIGN, DATE AND RETURN THE ENCLOSED WHITE PROXY CARD TODAY.
PLEASE DISCARD ANY BLUE PROXY CARD SENT TO YOU BY THE ELLIOTT GROUP. IF YOU HAVE
ALREADY RETURNED A BLUE PROXY CARD, YOU CAN REVOKE THAT PROXY BY RETURNING A
LATER DATED WHITE PROXY CARD.
If you have any questions as to how to vote your shares,
please call Martin Cohen at (212) 606-4389, or call our proxy solicitor,
Georgeson Shareholder, toll free at (800) 223-2064.
We would like to express our appreciation for your continued
support.
Sincerely,
Your Board of Directors
John W. Kluge, CHAIRMAN
Stuart Subotnick, VICE CHAIRMAN, CHIEF
EXECUTIVE OFFICER AND PRESIDENT
John P. Imlay, Jr., DIRECTOR
I. Martin Pompadur, DIRECTOR
Leonard White, DIRECTOR
Clark A. Johnson, DIRECTOR
Silvia Kessel, DIRECTOR, EXECUTIVE VICE
PRESIDENT, CHIEF FINANCIAL OFFICER AND
TREASURER
John S. Chalsty, DIRECTOR
***** IMPORTANT *****
This letter contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. As a result of a number of
factors, including factors that Metromedia International Group, Inc. may not
currently foresee, our results may differ materially from those set forth in the
forward-looking statements. Please refer to our filings with the Securities and
Exchange Commission for a more complete discussion of these factors.
INSTRUCTIONS
1. If your shares are registered in your own name, please sign, date and
mail the attached WHITE proxy card to Georgeson Shareholder in the
postage-paid envelope provided today.
2. If you have previously signed and returned a blue proxy card to Elliott
Associates, L.P., you have every right to change your vote. Only your
latest dated card will count. You may revoke any blue proxy card
already sent to Elliott Associates by signing, dating and mailing the
attached WHITE proxy card in the postage-paid envelope provided. Any
proxy may be revoked at any time prior to the 2001 Annual Meeting by
delivering a later dated proxy for the 2001 Annual Meeting or a written
notice of revocation to Georgeson Shareholder or the Secretary of
Metromedia International Group, Inc., or by voting in person at the
2001 Annual Meeting.
3. If your shares are held in the name of a brokerage firm, bank nominee
or other institution, only it can sign a WHITE proxy card with respect
to your shares and only after receiving your specific instructions.
Accordingly, please sign, date and mail the attached WHITE proxy card
in the postage-paid envelope provided. To ensure that your shares are
voted, you should also contact the person responsible for your account
and give instructions for a WHITE proxy card to be issued representing
your shares.
4. After signing the attached WHITE proxy card do not sign or return the
blue proxy card unless you intend to change your vote, because only
your latest dated proxy card will be counted.
If you have any questions about giving your proxy or require assistance, please
call:
[LOGO OF GEORGESON SHAREHOLDER]
17 STATE STREET
NEW YORK, NY 10004
CALL TOLL-FREE: 1-800-223-2064
BANKS AND BROKERAGE FIRMS CALL COLLECT: 212-440-9800