New York - Jun 19, 2008 - Westwood One has closed the sale of $75 million of a newly created series of preferred stock, 7.50 percent Series A Convertible Preferred Stock, to Gores Radio Holdings, an entity managed by The Gores Group. The Convertible Preferred Stock has an initial conversion price of $3.00 per share, which represents a 140 percent premium to the closing price of $1.25 for the company's stock price as of June 18, 2008. In connection with such sale, the Company issued to Gores four year warrants to purchase up to 10 million shares of Westwood common stock, exercisable at $5/share, $6/share and $7/share, respectively.
The preferred stock sale follows a $25 million investment in Westwood common stock by Gores in March 2008. Gores purchased 14,285,714 shares of Westwood common stock at $1.75 per share, which closed in March.
As part of the closing, WW1 increased the size of its board of directors to 11 directors. In accordance with the terms of the purchase agreement, three Gores' designees were elected to the Board: Scott Honour, senior managing director of The Gores Group; Mark Stone, senior managing director of The Gores Group and president, Gores Operations Group; and Ian Weingarten, managing director of The Gores Group. Additionally, Emanuel Nunez, senior agent at Creative Artists Agency, a Gores' nominee, was elected as an independent director to the Board
The transaction was approved by the company's shareholders at a special meeting held on June 17, 2008.