Shop At Home, Inc. Moves to Capitalize On Its Position in Fast-Growing Electronic Retailing Industry
NASHVILLE, Tenn.--(BUSINESS WIRE)--Aug. 14, 2002--Shop At Home Inc.,(Nasdaq:SATH) in a strategic move designed to fully capitalize on its position in the fast-growing electronic retailing industry, today signed an agreement with The E. W. Scripps Company that would create a strategic alliance between the two companies built on Shop At Home's electronic retailing division.
The agreement would result in Shop At Home continuing as a public company with five television stations, wireless spectrum rights and 30 percent interest in a new company that would include the assets of the Shop At Home Network. The new company would be 70 percent owned and operated by Scripps. Shop At Home would be paid $49.5 million for 70 percent of the new company and would obtain a $47.5 million loan from Scripps for three years with interest at 6 percent secured by three Shop At Home television stations.
Scripps would provide working capital for the new company to build the electronic retailing business that Shop At Home created and established. The new company would have a three-year affiliation agreement to carry its home shopping network programming on Shop At Home's five television stations. At the close of the proposed transaction Shop At Home would repay in full its $75 million Senior Secured Notes and its $17.5 million revolving credit facility.
"Since the beginning of our executive involvement 15 months ago, Shop At Home has been presented with many potential strategic opportunities," said George R. Ditomassi, who serves as co-chief executive officer with Frank A. Woods. "We believe this alliance with Scripps provides the best option for our shareholders to capitalize on the enormous growth being experienced in the TV home shopping industry. As a minority partner with a media powerhouse like Scripps, we can grow faster and stronger without giving up our economic future."
Woods added, "Shop At Home has consistently stated its intent to have a strong financial and operating structure in which to compete for transactional television dollars. Scripps will bring great added value and critical mass to the Shop At Home Network enabling the network to grow and prosper in the home shopping industry. The partnership of Scripps and Shop At Home provides an exciting opportunity that takes advantage of the resources needed to be successful in the fast growing world of transactional television."
Kenneth W. Lowe, president and chief executive officer for Scripps, said, "The opportunity to acquire control of the Shop At Home Network provides Scripps with an efficient way to quickly gain scale in a fast-growing industry that we believe is increasingly related to the media businesses we currently operate. The evolution of television retailing has created significant overlaps with the categories that are targeted by our popular and widely distributed lifestyle programming networks. We believe we can create value at the Shop At Home Network by building on the strong relationships we've developed with advertisers, distribution partners and viewers of our national cable networks, and the readers and viewers of Scripps newspapers and broadcast TV stations."
The senior management at Shop At Home will discuss the Scripps transaction during a telephone conference call at 11:00 a.m. Central Time Thursday, August 15. To access the call, dial 1-888-469-0937 approximately 10 minutes before the scheduled start time, and specify the password Woods2. There will be a limited number of phone lines available. Shop At Home will also offer a live audio Web cast of the conference call at www.shopathometv.com/corporate/news-index.html and a dial-in instant replay at 1-888-568-0499. The dial-in instant replay will be available August 15 through August 22, 2002 |
