ZoomerMedia Limited
TSX VENTURE : ZUM

ZoomerMedia Limited

November 05, 2009 13:39 ET

ZoomerMedia Limited Amends Terms of Fairfax Private Placement

TORONTO, ONTARIO--(Marketwire - Nov. 5, 2009) - ZoomerMedia Limited ("Zoomer") (TSX VENTURE:ZUM) today announced that Zoomer and Fairfax Financial Holdings Limited ("Fairfax") have agreed to amend the terms of the previously announced agreement pursuant to which Fairfax intends to invest $17.6 million in Zoomer on a private placement basis. The amendments have been made in order to ensure that the investment by Fairfax complies with the requirements of the CRTC relating to foreign ownership.

Previously, Fairfax had agreed to subscribe for and Zoomer had agreed to issue to Fairfax, on a private placement basis, 176 million common shares of Zoomer at a price of $0.10 per share. The terms of the private placement have been amended so that Fairfax has now agreed to subscribe for 44,025,901 common shares and 131,974,099 non-voting Series 1 Class A Preference Shares (the "Series 1 Shares"), all issued at a purchase price of $0.10 per share.

The investment by Fairfax continues to be subject to a number of conditions including, amongst other things, the completion of the acquisition by Zoomer of certain assets from Vision TV ("VTV") and the sale to Zoomer of several media and real estate assets (the "MZ Assets") currently owned directly or indirectly by Zoomer's President, Chief Executive Officer and majority shareholder, Moses Znaimer as previously disclosed.

The proposed terms for the acquisition of all of the MZ Assets have also been amended to now include the issuance to Moses Znaimer and Olympus Management Limited ("OML"), a company controlled by Moses Znaimer, of 4,094,970 common shares of Zoomer and 255,905,030 non-voting Series 2 Class A Preference Shares (the "Series 2 Shares"), all issued at a price of $0.10 per share, and cash consideration of $4 million. At the time of closing, OML intends to also exercise warrants to acquire 20 million common share of Zoomer at a price of $0.10 per share.

All Class A Preference Shares are non-voting and the holders of the Class A Preference Shares on any distribution of assets of Zoomer among its shareholders for the purpose of winding up its affairs, shall be entitled to receive from the assets and property of Zoomer for each Class A Preference Share (with all series within the class treated equally) held by the holder $0.10 plus all declared and unpaid dividends thereon, before any amount shall be paid or any property or assets of Zoomer distributed to the holders of the common shares. The Series 1 Shares can be exchanged at the option of Fairfax or Zoomer into common shares of Zoomer at any time provided that upon such conversion Zoomer will continue to satisfy the requirements of the CRTC relating to foreign ownership. The Series 2 Shares can be exchanged at the option of Moses Znaimer or Zoomer into common shares of Zoomer at any time provided that upon such conversion Zoomer will continue to satisfy the public float share distribution requirements of the TSX Venture Exchange.

Upon closing of all of the foregoing transactions, Moses Znaimer will control 165,157,970 common shares of Zoomer, representing 66.28% of the total common shares outstanding at the time of closing and 255,905,030 Series 2 Shares, representing 65.98% of the outstanding Class A Preference Shares at the time of closing.

Upon closing of all of the foregoing transactions, Fairfax will own 44,025,901 common shares of Zoomer representing 17.67% of the total common shares outstanding at the time of closing and 131,974,099 Series 1 Shares, representing 34.02% of the outstanding Class A Preference Shares at the time of closing. The gross proceeds received from Fairfax of $17.6 million will be used to finance the acquisition of the VTV assets and for general corporate purposes. Zoomer understands that Fairfax has subscribed for the common shares for investment purposes and may purchase additional common shares of Zoomer from time to time in accordance with applicable laws. A copy of the early warning report filed by Fairfax pursuant to applicable Canadian securities laws may be obtained on SEDAR or by contacting Paul Rivett, Vice President and Chief Legal Officer of Fairfax, at 416-367-4941.

The completion of the acquisition of the assets from VTV and the acquisition of certain radio assets from Moses Znaimer are subject to CRTC approval. The completion of all of the transactions described above is subject to shareholder approval, TSX Venture Exchange approval and to the extent any of the transactions are considered related party transactions, minority shareholder approval. Assuming all requisite approvals are secured, all of the foregoing transactions are expected to close in spring of 2010.

About ZoomerMedia Limited

Zoomer publishes Zoomer Magazine, the largest paid circulation magazine in Canada for the mature market. Published nine times a year, Zoomer Magazine has a paid circulation of approximately 180,000 and places approximately a further 40,000 copies on newsstands.

Zoomer also derives royalty revenue through the provision of exclusive marketing and membership services to CARP, A New Vision of Aging for Canada.

Zoomer is also Canada's leading provider of online content targeting the 45 plus age group. Its portfolio of web sites and electronic newsletters delivers over 2 million page per views per month. The key property is www.50plus.com, which offers a wide range of information, entertainment, community connection (forums, dating, blogs) and commerce together with four electronic newsletters (health, money, travel, lifestyle), each of which has over 120,000 opt-in subscribers.

Zoomer also produces and manages www.carp.ca, the online home of CARP. With approximately 350,000 members, CARP is Canada's largest association for the 45 plus. Zoomer also produces CARP Action Online, an electronic newsletter for CARP members.

Cautionary note on forward looking statements

Completion of the transactions described above is subject to a number of conditions, including TSX Venture Exchange acceptance and disinterested shareholder approval. The transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all. Certain statements made in this report are 'forward-looking statements' which may include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the words 'believe', 'anticipate', 'expect', 'estimate', 'project', 'will be', 'will continue', 'will likely result' or similar words or phrases. Forward-looking statements involve risks and uncertainties, which may cause actual results to differ materially from the forward-looking statements. The risks and uncertainties are detailed from time to time in filings by ZoomerMedia Limited with provincial securities commissions. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Such risks, uncertainties and other factors include, but are not limited to, the following:

  • the risks inherent in magazine publishing generally;
  • the risks inherent in the operation of Internet media properties generally;
  • the Company's dependency on a few large customers;
  • the competition within the media industry for the baby boom generation's business;
  • the risks associated with governmental regulation of the publishing and internet businesses;
  • the results of legal claims made by or against the Company;
  • the risk of managing the current revenue growth rate;
  • the dependence of the business on the continuing operation of its computer systems; and
  • the dependence on key personnel.

Given these risks, and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. ZoomerMedia Limited does not intend and does not assume any obligation to update these forward-looking statements.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.

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