Investors take control of Ion


NEW YORK -- Ion Media Networks Inc. has reached a deal with investment firm Citadel Investment Group and NBC Universal to be recapitalized and taken private, it was announced Friday.

With the agreement announced Friday, Citadel will take control of the broadcaster and owner of 60 TV stations, with NBC Universal getting options to acquire control down the line.

NBC Uni is transferring to Citadel the call right on founder Bud Paxson's controlling shares that it acquired in November 2005, when NBC Uni restructured its investment in Ion.

In turn, Citadel will exercise the call right, launch a cash tender offer for Ion's outstanding Class A common stock at $1.46 per share and invest $100 million to fund Ion's growth and digital investment plans.

NBC Uni will continue to hold a minority stake in the form of nonvoting securities and under the agreement with Citadel has options to acquire voting control of Ion. These options have an initial term of five years.

"Currently, NBC Universal is prohibited from exercising control over the company because of federal regulations regarding TV station ownership," the companies said.

The proposed transaction is subject to regulatory approvals. Shares of Ion rose 6.9% to $1.40 in trading Friday.

The news came after reports last week that satellite TV provider EchoStar Communications had offered to acquire Ion in a $2 billion deal but was rejected.

Former NBC Uni executive Brandon Burgess has led Ion as CEO and focused on putting the firm on a firmer footing. Ion, which changed it name from Paxson Communications in February 2006, held an upfront presentation Thursday night for advertisers, unveiling a big programming initiative with RHI Entertainment.