Hemisphere Media Group, Inc. (NASDAQ: HMTV) is engaged as a U.S.-based media company targeting the Hispanic and Latin American markets with TV, streaming and digital content platforms. Shares of the Spanish-language entertainment company are surging 79% through early trading on Monday, May 9, 2022. Over the past three months, Hemisphere Media Group has seen average daily volume of 118,340 shares. However, volume of 518,877 shares or dollar volume of around $3.51 million, has already exchanged hands through early trading.
Shares of Hemisphere Media Group are soaring after the company announced it has entered into a definitive agreement to be acquired by a subsidiary of Gato Investments LP, a portfolio investment of Searchlight Capital Partners LP. Under the terms of the agreement, Gato Investments will pay $7.00 per share in cash for Hemisphere Media Group, which will become a private company when the transaction is completed. The offer of $7.00 per share in cash represents a premium of 86% compared to its closing price on May 6, 2022.
In addition to the announced takeover, Hemisphere Media Group also disclosed entering into an agreement to sell its Pantaya assets, a leading Spanish language streaming platform, to TelevisaUnivision. In exchange, Hemisphere would receive cash and certain Puerto Rican radio assets including WKAQ AM and KQ105 FM, which are currently owned by TelevisaUnivision.
Under the terms of the agreement with Gato Investments, Hemisphere Media Group will have a 30-day “go-shop” period to actively solicit and review alternative acquisition proposals. The deal is subject to standard closing conditions and is scheduled to be completed during the third quarter of 2022.
“We are pleased to have reached this agreement with Gato, which we believe is the right path forward for our organization and delivers immediate value and certainty to stockholders,” said Alan Sokol, Chief Executive Officer of Hemisphere. “We have worked tirelessly to create an extraordinary portfolio of assets, and this transaction is a direct reflection of the quality of our networks, growing audience, and premium news and entertainment outlets. As a private company, and with the support of Gato, we will have the ability to make long-term investments in content and innovation that will best serve Hemisphere’s audiences.”
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