CTCM Ctc Media, Inc. (MM)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  February 12, 2016

CTC MEDIA, INC.

(Exact Name of Registrant as Specified in Charter)

Registrant’s telephone number, including area code: +7-495-785-6347

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨                          Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨                          Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨                          Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨                          Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01.                                        Completion of an Acquisition or Disposition of Assets

On February 12, 2016, CTC Media, Inc., a Delaware corporation (the “Company”) announced that it has received the final tranche of the purchase price in connection with its sale of 75% of the outstanding participation interests in its subsidiary CTC Investments LLC to UTV-Management LLC (the “Purchaser”) pursuant to the Framework Agreement, dated as of September 24, 2015, as amended, by and between the Company and the Purchaser (the “Agreement”). The sale closed on December 23, 2015 and the Company received $150.5 million in cash at closing. An additional $50 million was held back at closing pursuant to the Agreement, and was subject to adjustment based on the performance of the Company during the second half of 2015 and certain indemnity obligations.  As the final tranche of the purchase price, the Company has received $42.5 million of this holdback amount in cash from the Purchaser.  The $7.5 million reduction in the total purchase price reflects adjustments for several factors, including identified underinvestment and deferred payments by the Company in the second half of 2015 compared with the agreed target budget; a reduction in working capital compared with an agreed target, reflecting the impairment of certain programming content; and indemnification in connection the settlement of a commercial litigation matter. The total consideration received in connection with the sale was therefore $193.1 million.

As previously disclosed, the Company intends to return value in cash to the Company’s stockholders (other than Telcrest Investments Limited (“Telcrest”), which holds shares of the Company’s common stock that have been identified as blocked property pursuant to applicable sanctions associated with the Specially Designated Nationals and Blocked Persons List of the U.S. Department of Treasury, Office of Foreign Assets Control (“OFAC”)).  In order to effect such return of value, the Company entered into the Agreement and Plan of Merger, dated as of November 16, 2015 (the “Merger Agreement”), by and between the Company and CTCM Merger Sub, Inc., the Company’s wholly owned subsidiary (“Merger Sub”), which was adopted by the Company’s stockholders at the Special Meeting on December 17, 2015.  Pursuant to the Merger Agreement, Merger Sub would merge with and into the Company, with the Company surviving and each holder of the Company’s common stock as of the effective time of the merger (other than Telcrest) becoming entitled to receive cash consideration per share based on the aggregate amount of the Company’s available cash as of the time of the merger.  The shares of common stock held by Telcrest would remain outstanding following the merger, and Telcrest will be the Company’s sole stockholder.  Following the merger, the Company would cease to be a publicly traded company.

The Company has requested a license from OFAC to authorize the merger transaction, but such license has not yet been granted.  Assuming such license is granted and the necessary closing conditions are satisfied, the Company expects that the merger will close approximately one month following receipt of such license. Given the uncertainty regarding the timing of receipt of such license, if at all, the Company is unable to estimate at this time the per share amount that would ultimately be returned to stockholders in such merger, but currently expects that it would be at the lower end of the upper half of the range approved by stockholders of $1.77 to $2.19 per share. The Company will update the market as and when the timing and final terms of such proposed transaction are known.

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The foregoing descriptions of the sale and the merger do not purport to be complete and are qualified in their entirety by reference to the Agreement, which is attached as Exhibit 2.1 hereto and incorporated herein by reference.

Item 8.01.                                        Other Events

On February 12, 2016, the Company issued a press release announcing its receipt of the final tranche of the purchase price in connection with its sale of 75% of the outstanding participation interests in its subsidiary CTC Investments LLC, a copy of which is attached as Exhibit 99.1 and is incorporated herein by reference.

(d)                                 Exhibits

2.1                               Framework Agreement, dated as of September 24, 2015, as amended, by and between CTC Media, Inc. and UTV-Management LLC, incorporated by reference to Annex A of the Definitive Proxy Statement on Schedule 14A of the Company, dated November 17, 2015, filed by the Company with the SEC on November 17, 2015.

2.2                               Amendment No. 1 to the Framework Agreement, dated December 15, 2015, by and between CTC Media, Inc. and UTV-Management LLC, incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K of the Company, dated December 15, 2015, filed by the Company with the SEC on December 16, 2015.

2.3                               Amendment No. 2 to the Framework Agreement, dated December 22, 2015, by and between CTC Media, Inc. and UTV-Management LLC, incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K of the Company, dated December 22, 2015, filed by the Company with the SEC on December 22, 2015.

99.1                        Press release dated February 12, 2016.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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EXHIBIT INDEX

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Exhibit 99.1

CTC MEDIA, INC. ANNOUNCES RECEIPT OF FINAL TRANCHE
OF PURCHASE PRICE FOR BUSINESS SALE

Moscow, Russia — February 12, 2016 — CTC Media, Inc. (the “Company”) (NASDAQ: CTCM) today announced that it has received the final tranche of the purchase price for its sale of 75% of the outstanding participation interests in its subsidiary CTC Investments LLC to UTV-Management LLC. The sale closed on December 23, 2015, and was intended to bring the operating business into compliance with the foreign ownership restrictions of the Russian Mass Media Law, which became effective on January 1, 2016.  CTC Media, Inc. received $150.5 million in cash at closing. An additional $50 million was held back and was subject to adjustment based on the performance of the business during the second half of 2015 and agreed indemnity obligations. The Company has received $42.5 million of this additional consideration in cash.  The $7.5 million reduction in the total purchase price reflects adjustments for several factors, including identified underinvestment and deferred payments by the group in the second half of 2015 compared with the agreed target budget; a reduction in working capital compared with the agreed target, reflecting the impairment of certain older programming content; and indemnification in connection with the settlement of a commercial litigation matter. The total consideration received in connection with the sale was $193.1 million.

Werner Klatten, Chairman of the Special Committee of the Board of CTC Media, Inc., commented: “The management team achieved solid operating results in the second half of 2015 in a challenging and deteriorating market environment in Russia.  Against this macroeconomic backdrop, this performance helped to limit the reduction in the purchase price. We look forward to completing the proposed merger transaction to return value to stockholders as soon as possible.”

As previously announced, the Company’s stockholders have approved a proposed merger transaction in which a wholly owned subsidiary of the Company would merge with and into the Company, with the Company surviving. Each holder of the Company’s outstanding common stock as of the effective time of the merger, other than Telcrest (the holder of 25% of the Company’s outstanding shares), would be entitled to receive cash consideration per share based on the aggregate amount of the Company’s available cash at such time, net of cash reserves that will be appropriate to be retained by the Company in light of potential liabilities and obligations. The shares of common stock held by Telcrest would remain outstanding following the merger, and Telcrest would be the Company’s sole stockholder. Following the merger, the Company would cease to be a publicly traded company.

The Company has requested a license from the Office of Foreign Assets Control of the U.S. Treasury Department to authorize the proposed merger transaction; such license has not yet been received. Assuming such license is granted and the necessary closing conditions are satisfied, the Company expects that the merger will close approximately one month following receipt of such license. Given the uncertainty regarding the timing of receipt of such license, if at all, the Company is unable to estimate at this time the per share amount that would ultimately be returned to stockholders in such merger, but currently expects that it would be at the lower end of the upper half of the range approved by stockholders of $1.77 to $2.19 per share. The Company will update the market as and when the timing and final terms of such proposed transaction are known.

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For further information, please visit www.ctcmedia.ru or contact:

Hudson Sandler (European Media)

Andrew Hayes / Elena Garside +44 (0)20 7796 4133

CTC Media, Inc.

Investor Relations

+7 495 981 0740

ir@ctcmedia.ru

Media Relations

+7 (495) 785 63 47

pr@ctcmedia.ru

About CTC Media, Inc. and CTC Investments

CTC Media, Inc. is traded on NASDAQ under the symbol “CTCM”. CTC Media, Inc. holds a 25% interest in CTC Investments.

CTC Investments is a leading Russian content holding. The group manages four television channels in Russia (CTC, Domashny, Che and CTC Love), as well as Channel 31 in Kazakhstan. The international version of CTC Channel is available in North America, Europe, Central Asia, Armenia, Georgia, Azerbaijan, the Middle East and Kyrgyzstan. The international version of Peretz is also available in Belarus and in Kyrgyzstan. CTC Investments also owns several digital entertainment media assets including videomore.ru, domashniy.ru, ctc.ru, chetv.ru and CarambaTV.

Caution Concerning Forward-Looking Statements

Certain statements in this press release that are not based on historical information are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, among others, statements regarding the Company’s proposed merger transaction to be consummated between the Company and a wholly owned subsidiary of the Company; receipt of a license from the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”) to authorize the proposed merger transaction; the timing of the proposed merger transaction, if authorized by OFAC; and the per share amount that would ultimately be returned to stockholders as a result of the proposed merger transaction. These statements reflect the Company’s current expectations concerning future results and events. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements.

The potential risks and uncertainties that could cause actual future results to differ from those expressed or implied by forward-looking statements include, among others, risks associated with geopolitical events involving Russia and the other countries in which the Company operates, including any potential negative economic impact of such events; the effect of international economic sanctions; and developments affecting the cash requirements of the Company. These and other risks are described in the “Risk Factors” section of CTC Media, Inc.’s quarterly report on Form 10-Q filed with the SEC on November 9, 2015.

Other unknown or unpredictable factors could have material adverse effects on CTC Media, Inc.’s future results, performance or achievements. You are cautioned not to place undue reliance on these forward-looking statements. CTC Media, Inc. does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.