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SEC Filings

S-4/A
AVALON CABLE OF MICHIGAN INC/ filed this Form S-4/A on 07/22/1999
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notice of their election to exercise appraisal rights as provided by Delaware
law. On July 2, 1999, former shareholders of Mercom holding 535,501 shares of
Mercom common stock filed a petition for appraisal of stock in the Court of
Chancery in the State of Delaware seeking the fair value of their shares of
Mercom common stock, together with interest, all costs of the proceeding,
including reasonable attorneys' fees and expenses of experts, including an
award pursuant to section 262(j) of the General Corporation Law of the State
of Delaware, and such other relief as the Court deems just, proper and
equitable. With respect to 209,893 of the total number of shares for which we
received notice, we received the notice of election from beneficial holders of
Mercom common shares and not from holders of record. We believe that the
notice with respect to the 209,893 shares did not comply with Delaware law and
is ineffective. We cannot predict at this time the effect of these elections
or the results of any appraisal proceedings on us since we do not know the
extent to which these former shareholders will continue to pursue appraisal
rights under Delaware law or choose to abandon these efforts and accept the
consideration payable in the Mercom merger. If these former shareholders
continue to pursue their appraisal rights and if a Delaware court were to find
that the fair value of the Mercom common shares, exclusive of any element of
value arising from our acquisition of Mercom, exceeded $12.00 per share, we
would have to pay the additional amount for each Mercom common share subject
to the appraisal proceedings together with a fair rate of interest. In
addition, we would have to pay our own litigation costs. We have already
provided for the consideration of $12.00 per Mercom share due under the terms
of our merger with Mercom with respect to these shares but have not provided
for any additional amounts or costs. We can provide no assurance as to what a
Delaware court would find in any appraisal proceeding or when this matter will
be resolved. Accordingly, we cannot assure you that the ultimate outcome would
not have a material adverse effect on us.     
 
Recent Developments
   
   On May 13, 1999, we signed an agreement with Charter Communications, Inc.
under which Charter Communications agreed to purchase our company and assume
or repay our outstanding debt. The acquisition by Charter Communications
requires many regulatory approvals. We expect to consummate this transaction
in the fourth quarter of 1999, subject to obtaining the required regulatory
approvals. There can be no assurance, however, whether or when this
acquisition will occur. The acquisition, if completed, will give rise to an
obligation to make an offer to purchase the notes to be issued in this
exchange offer at 101% of their accreted value. For more information on the
provisions of the indenture governing this change of control offer, see
"Description of the Notes--Repurchase at the Option of Holders--Change of
Control." No change of control offer is being made hereby. If the transaction
with Charter Communications is completed, the issuers will be obligated to
provide you with information regarding the change of control offer as required
by the indenture and applicable law.     
 
   The agreement with Charter Communications contains customary covenants
limiting our ability, among other things, to do the following, subject in each
case to specified exceptions:
 
  . merge with or acquire the assets of any other person;
 
  . borrow money;
 
  . dispose of material assets or property;
 
  . enter into, terminate or amend in a material and adverse respect any
    material agreement; and
 
  . decrease rates or repackage any programming tiers.
 
   Charter Communications is among the leading broadband communications
companies in the United States. Charter Communications currently provides
cable television, high speed Internet access, advanced digital video
programming and paging services to customers.
   
   In July 1999, we acquired cable systems assets and related liabilities of
Taconic Technology Corporation.     
 
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