INNOVATE (NYSE: VATE) plans CONX deal, $105M loan and 75% sale
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
INNOVATE Corp. has agreed to a merger transaction that will transfer control of its Broadcasting subsidiary to CONX Corp., subject to regulatory approvals. After closing, CONX is expected to own about 75% of Broadcasting, while INNOVATE will retain roughly 25% through HC2 Holdco.
To support the deal and clean up legacy debt, Broadcasting entered into a new $105 million bridge loan from a CONX subsidiary. The proceeds fully satisfied its 8.50% and 11.45% notes, funded repurchases of certain equity interests, and covered transaction costs. This bridge loan bears 8.00% annual interest, matures in one year and will be extinguished, rather than repaid in cash, when the merger closes, provided conditions are met.
CONX has also committed up to $75 million of post-closing equity funding for Broadcasting. INNOVATE obtained an 18‑month option to buy up to 15% of the surviving entity’s equity from CONX, while a CONX affiliate received a two‑year option to acquire up to 80.1% of Broadcasting’s equity on a fully diluted basis. INNOVATE amended its existing notes and credit agreement, with lenders consenting to the merger, the new loan and waiving related defaults.
Positive
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Negative
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Insights
INNOVATE restructures Broadcasting with a CONX-led control sale and debt swap.
The transaction combines a change of control at Broadcasting with a refinancing that replaces outstanding 8.50% and 11.45% notes using a $105 million bridge loan from a CONX affiliate. That bridge accrues 8.00% PIK interest and is designed to be extinguished in the merger rather than repaid in cash.
Post-closing, CONX is expected to own about 75% of Broadcasting, while INNOVATE retains around 25% and access to up to $75 million in equity commitments from CONX. Supplemental indentures and a credit agreement amendment secure noteholder and lender consents and waive defaults related to the deal.
Optionality is a key feature: INNOVATE can repurchase up to 15% of the surviving entity within 18 months of closing, while a CONX affiliate has a two‑year option to acquire up to 80.1% of Broadcasting. Actual outcomes will depend on regulatory approvals, including FCC and Hart‑Scott‑Rodino clearances, and on whether these options are exercised over the disclosed timeframes.
8-K Event Classification
4 items: 1.01, 2.03, 7.01, 9.01
4 items
Item 1.01
Entry into a Material Definitive Agreement
Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
Financial
The company incurred a new significant debt or off-balance-sheet obligation.
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Bridge Loan Facility: $105 million
Bridge Loan Interest Rate: 8.00% per annum
Minimum Cash Return: 1.50:1.00
+5 more
8 metrics
Bridge Loan Facility
$105 million
Aggregate principal amount of new bridge loan to Broadcasting
Bridge Loan Interest Rate
8.00% per annum
Interest on Loans under Bridge Loan Facility, payable in kind
Minimum Cash Return
1.50:1.00
Required cash return on Loans if repaid early, accelerated or at maturity without merger
Equity Commitment
$75 million
Maximum equity commitment from CONX to Broadcasting after merger closing
INNOVATE Post-Closing Stake
approximately 25%
Expected retained interest in Broadcasting via HC2 Holdco
CONX Post-Closing Stake
approximately 75%
Expected ownership of Broadcasting after merger
INNOVATE Call Option
up to 15% equity
Option period of 18 months after merger closing to buy additional Broadcasting ownership
CONX Affiliate Option
up to 80.1% equity
Two-year option to acquire up to 80.1% of Broadcasting on a fully diluted basis
Key Terms
Bridge Loan Facility, Hart-Scott-Rodino Antitrust Improvements Act of 1976, Supplemental Indentures, Convertible Senior Secured Notes, +2 more
6 terms
Bridge Loan Facility financial
"The New Loan Agreement provides for a bridge loan facility in an aggregate principal amount of $105 million"
A bridge loan facility is short-term financing that helps a company cover an immediate cash need while it arranges longer-term funding, like a temporary bridge spanning a river until a permanent road is built. For investors, it matters because it signals short-term liquidity pressure or planned transactions, can carry higher interest or fees, and may affect future equity or debt terms if the company must refinance, dilute shares, or accept tighter covenants.
Hart-Scott-Rodino Antitrust Improvements Act of 1976 regulatory
"the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976"
Supplemental Indentures financial
"entered into certain supplemental indentures, including (i) a supplemental indenture (the “10.500% Notes Supplemental Indenture”)"
Supplemental indentures are formal amendments to the original contract that governs a bond or other debt, changing terms such as repayment schedule, interest, collateral, or borrower promises. They matter to investors because they can increase or reduce the risk and value of a security—like updating a rental agreement for new rules—so investors need to know whether protections were weakened, strengthened, or left unchanged.
Convertible Senior Secured Notes financial
"governing its 9.5% Convertible Senior Secured Notes due 2027"
A convertible senior secured note is a loan that a company issues which is backed by specific assets and gets paid before other debts if the company fails, while also giving lenders the option to convert the loan into the company’s shares. For investors this matters because the security and senior status reduce credit risk like a mortgage on a house, but the conversion feature can dilute existing shareholders and tie returns to the stock’s future performance.
Class A and LPTV licenses technical
"Today the segment operates the largest portfolio of Class A and LPTV licenses in the country"
ATSC 3.0 technical
"the development of ATSC 3.0 and 5G capabilities"
ATSC 3.0 is the latest digital television broadcast standard that delivers higher-resolution video and audio, more reliable reception, and internet-style data services through the same over-the-air signal. For investors, it represents a platform upgrade—like moving from a basic phone to a smartphone for TV—that can create new revenue streams (targeted ads, interactive services, equipment sales) and change competitive dynamics for broadcasters, device makers, and service providers.
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
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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) | ||||
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company | | |||||||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | ||||
| Item 1.01 | Entry into a Material Definitive Agreement | ||||
Merger Agreement
On May 29, 2026, HC2 Broadcasting Holdings Inc. (“Broadcasting”) and HC2 Broadcasting Holdco, LLC (“HC2 Holdco”), each an indirect wholly owned subsidiary of INNOVATE Corp., a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with HC2 Merger Sub, LLC, a Delaware limited liability company (“Merger Sub”), and CONX Corp., a Nevada corporation (“CONX”), pursuant to which Merger Sub will merge with and into Broadcasting (the “Merger”), with Broadcasting surviving the Merger as a subsidiary of CONX (the “Surviving Entity”).
On the terms and subject to the conditions set forth in the Merger Agreement, at the closing of the Merger (the “Closing”), (a) the shares of common stock, par value $0.001 per share, of Broadcasting (the “Broadcasting Common Stock”) (other than shares of Broadcasting Common Stock held by Merger Sub after giving effect to the closing of the Merger) will be converted into the right to receive 25% of the shares of common stock of the Surviving Entity to be outstanding immediately following the Closing, subject to certain adjustments as set forth in the Merger Agreement, and (b) the membership interests of Merger Sub outstanding immediately prior to the Closing will be converted into 75% of the shares of common stock of the Surviving Entity to be outstanding immediately following the Closing, subject to certain adjustments as set forth in the Merger Agreement, which represents the value attributable to (i) the extinguishment of the Loans (as defined below) and (ii) the funding of an aggregate $75 million in equity commitments by CONX in favor of the Surviving Entity from time to time, at or following the Closing, which equity commitments are subject to certain adjustments as set forth in the Merger Agreement.
The Merger Agreement contains customary representations and warranties by each of the parties, and certain covenants, including covenants relating to (a) the conduct of Broadcasting’s business between the execution of the Merger Agreement and the Closing and (b) their respective efforts to consummate the Merger, including obtaining the required regulatory approvals.
The Closing is subject to customary conditions, including (a) receipt of regulatory approvals, including certain approvals of the Federal Communications Commission and the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and (b) that the obligations under the New Loan Agreement (as defined below) shall not have been declared due and payable.
The Merger Agreement provides customary termination rights for the parties, including if the Merger has not occurred on or prior to November 29, 2026, subject to two potential extensions to March 1, 2027 and May 29, 2027 in the event the only condition to the Merger that remains unsatisfied as of such dates is the receipt of certain regulatory approvals and certain other exceptions, and contains certain indemnification obligations by the parties thereto in connection with breaches of certain representations and warranties and certain covenants contained in the Merger Agreement, subject to certain exceptions.
The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
New Loan Agreement
On May 29, 2026 (the “Loan Closing Date”), Broadcasting entered into a loan agreement (the “New Loan Agreement”), as borrower, with Merger Sub, as lender and HC2 Holdco and certain of Broadcasting’s subsidiaries, as guarantors.
The New Loan Agreement provides for a bridge loan facility in an aggregate principal amount of $105 million (the “Bridge Loan Facility”), to be funded in a single drawing on the Loan Closing Date. The proceeds of the Bridge Loan Facility will be used to (a) fully satisfy and discharge all non-contingent obligations, including all accrued and unpaid interest and fees, under Broadcasting’s and certain of its subsidiaries’ 8.50% and 11.45% notes (the “Existing Notes”) and (b) repurchase equity interests in Broadcasting and DTV America Corporation held by certain holders of the Existing Notes.
Broadcasting’s obligations under the Bridge Loan Facility are guaranteed by HC2 Holdco and certain of Broadcasting’s subsidiaries (collectively, the “Guarantors”), and such guarantees are secured by substantially all of the assets of each such Guarantor on a first lien basis (subject to certain customary exclusions).
Loans under the Bridge Loan Facility (“Loans”) will accrue interest at a rate per annum equal to 8.00%, payable quarterly in kind by capitalizing such interest as additional principal of the Bridge Loan Facility on each interest payment date. The Bridge Loan Facility matures on the first anniversary of the Loan Closing Date. Broadcasting may not voluntarily prepay the Loans prior to maturity. In the event of any early repayment or acceleration of the Loans, or the Loans reaching maturity without the occurrence of the consummation of the Merger, Broadcasting is required to repay in cash an amount sufficient to result in a minimum cash return on the original principal amount of the Loans, including all accrued and capitalized interest thereon, of 1.50:1.00. Upon consummation of the Merger, the Loans (including all accrued and capitalized interest thereon) will be extinguished in full.
The New Loan Agreement contains certain affirmative and negative covenants that limit the ability of Broadcasting and the Guarantors, among other things, and subject to certain exceptions, to incur debt or liens, make investments, enter into certain mergers, consolidations, and acquisitions, and pay dividends and make other restricted payments. The New Loan Agreement contains certain events of default, including relating to a change of control and termination of the Merger Agreement.
The foregoing description of the New Loan Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the New Loan Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Supplemental Indentures
In connection with the Merger, on May 29, 2026, the Company, certain subsidiary guarantors, and U.S. Bank Trust Company, National Association, as trustee (in such capacity, the “Trustee”) and notes collateral agent (in such capacity, the “Collateral Agent”), entered into certain supplemental indentures, including (i) a supplemental indenture (the “10.500% Notes Supplemental Indenture”) to the Indenture, dated August 4, 2025 (the “10.500% Notes Indenture”) governing its 10.500% Senior Secured Notes due 2027 (the “10.500% Notes”), and (ii) a supplemental indenture (the “9.5% Notes Supplemental Indenture”, and, together with the 10.500% Notes Supplemental Indenture, the “Supplemental Indentures”) to the Indenture, dated August 4, 2025 (the “9.5% Notes Indenture”, and, together with the 10.500% Notes Indenture, the Indentures) governing its 9.5% Convertible Senior Secured Notes due 2027 (the “9.5% 2027 Notes”, and, together with the 10.500% 2027 Notes, the “Notes”). Pursuant to the Supplemental Indentures, certain provisions of the Indentures, including certain definitions and negative covenants, were amended with the consent of the holders of at least a majority in aggregate principal amount of the Notes outstanding voting as a single class (the “Requisite Holders”). In addition, the Requisite Holders consented to the transactions related to the Merger and the New Loan Agreement and waived any and all defaults, events of default or other defaults that may have occurred, or that may arise under the Indentures as a result thereof.
MSD Credit Agreement Amendment
In connection with the Merger, on May 29, 2026, the Company entered into a ninth amendment (the “Ninth Amendment”) to the Credit Agreement, dated as of March 13, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “MSD Credit Agreement”) among the Company, certain subsidiary guarantors and MSD PCOF Partners IX, LLC, as lender (the “Lender”). Pursuant to the Ninth Amendment, certain provisions of the MSD Credit Agreement, including certain definitions and negative covenants, were amended with the consent of the Lender. In addition, the Lender consented to the transactions related to the Merger and the New Loan Agreement and waived any and all defaults, events of default or other defaults that may have occurred, or that may arise under the MSD Credit Agreement as a result thereof.
The foregoing descriptions of the Supplemental Indentures and the Ninth Amendment are summaries and are qualified in their entirety by reference to each of the Supplemental Indentures, which are attached hereto as Exhibits 10.2 and 10.3, and the Ninth Amendment, which is attached hereto as Exhibit 10.4, and are incorporated herein by reference.
Option Agreement
In connection with the Merger, on May 29, 2026, CONX, Merger Sub, Broadcasting, HC2 Holdco and the Company entered into an Option Agreement (the “Option Agreement”), pursuant to which HC2 Holdco has the right, but not the obligation, to purchase from CONX up to an aggregate of 15% of the equity interests in the Surviving Entity (the “Surviving Entity Equity Interests”), on a fully diluted basis, at any time during the period commencing on the closing date of the Merger and ending on the date that is 18 months from the closing date (the “Option Expiration Date”).
The option is subject to an aggregate maximum purchase price. The number of Surviving Entity Equity Interests to be purchased upon any exercise will be calculated by dividing the applicable exercise amount by a specified equity valuation and
multiplying by the number of fully diluted equity interests outstanding as of the date of the applicable exercise notice. HC2 Holdco may exercise the option on one or more occasions, in whole or in part, subject to a minimum exercise amount.
The Option Agreement also provides that, from the date of the Option Agreement until the Option Expiration Date, in the event that the Company or any of its affiliates consummates any asset sale (as defined in the Option Agreement), the Company must cause HC2 Holdco to apply the net cash proceeds from such asset sale to exercise the option, subject to certain exceptions and a working capital reserve.
The foregoing description of the Option Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Option Agreement, a copy of which is attached hereto as Exhibit 10.5 and is incorporated herein by reference.
CONX Affiliate Letter Agreement
In connection with entry into the Merger Agreement, CONX, an affiliate of CONX (the “CONX Affiliate”), and the Company entered into a letter agreement, dated as of May 29, 2026 (the “CONX Affiliate Letter Agreement”), pursuant to which CONX and the Company granted the CONX Affiliate the option to acquire up to 80.1% of the equity interests of Broadcasting, on a fully-diluted basis, at any time during the two-year period following the date of the CONX Affiliate Letter Agreement, at a price equal to the fair market value of the equity interests acquired, calculated as of the expected date of the closing of such option. If the CONX Affiliate exercises the option , the Company will have a certain period of time to exercise its option under the Option Agreement, after which, if not exercised, the option under the Option Agreement will automatically terminate.The Company may elect to require the CONX Affiliate to acquire all of the equity interests held by the Company at the later to occur of the Closing or the closing of such option exercise by the CONX Affiliate.
The above summary of the material terms of the CONX Affiliate Letter Agreement does not purport to be complete and is qualified in its entirety by reference to the CONX Affiliate Letter Agreement, a copy of which is filed as Exhibit 10.6 hereto and incorporated by reference herein.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant. | ||||
The information set forth under Item 1.01 of this Current Report on Form 8-K under the heading “New Loan Agreement” is incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure. | ||||
On June 1, 2026, the Company issued a press release announcing the Merger and the related transactions. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in this Item 7.01, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.
| Item 9.01 | Financial Statements and Exhibits. | ||||
(d) Exhibits
Exhibit No. | Description | ||||
| 2.1* | Agreement and Plan of Merger, dated as of May 29, 2026, among CONX Corp., HC2 Merger Sub, LLC, HC2 Broadcasting Holdco, LLC and HC2 Broadcasting Holdings Inc. | ||||
| 10.1* | Loan Agreement, dated as of May 29, 2026, by and between, inter alios, HC2 Broadcasting Holdings Inc., as borrower, and HC2 Merger Sub, LLC, as lender. | ||||
| 10.2 | Supplemental Indenture, dated as of May 29, 2026, by and among INNOVATE Corp., the Subsidiary Guarantors named therein, and U.S. Bank Trust Company, National Association, relating to the Company’s 10.500% Senior Secured Notes due 2027. | ||||
| 10.3 | Supplemental Indenture, dated as of May 29, 2026, by and among INNOVATE Corp., the Subsidiary Guarantors named therein, and U.S. Bank Trust Company, National Association, relating to the Company’s 9.5% Convertible Senior Secured Notes due 2027. | ||||
| 10.4 | Ninth Amendment to Credit Agreement, dated as of May 29, 2026, by and among INNOVATE Corp., the Guarantors named therein and MSD PCOF Partners IX, LLC, relating to the Company’s MSD Credit Agreement. | ||||
| 10.5 | Option Agreement, dated as of May 29, 2026, by and among CONX Corp., HC2 Merger Sub, LLC, HC2 Broadcasting Holdings Inc., HC2 Broadcasting Holdco, LLC and INNOVATE Corp. | ||||
| 10.6 | Letter Agreement, dated as of May 29, 2026, by and among CONX Corp., the CONX Affiliate and INNOVATE Corp. | ||||
| 99.1 | Press Release of INNOVATE Corp., dated June 1, 2026. | ||||
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document). | ||||
* The schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally a copy of such schedules and exhibits, or any section thereof, to the SEC upon request.
SIGNATURES
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.
Date: June 1, 2026
| INNOVATE Corp. | |||||||||||||||||
| By: | /s/ Michael J. Sena | ||||||||||||||||
| Name: Michael J. Sena | |||||||||||||||||
| Title: Chief Financial Officer | |||||||||||||||||
 | Exhibit 99.1 | ||||
INNOVATE Announces Successful Closing of Broadcasting Refinancing and Agrees to Partial Sale of Broadcasting
NEW YORK, NY, June 1, 2026 (GLOBE NEWSWIRE) -- INNOVATE Corp. (NYSE: VATE) (“INNOVATE” or the “Company”) announced today that HC2 Broadcasting Holdings Inc. (“Broadcasting”) closed on a refinancing transaction and that Broadcasting and HC2 Broadcasting Holdco, LLC (“HC2 Holdco”), subsidiaries of INNOVATE, have entered into a definitive agreement pursuant to which INNOVATE will sell a controlling interest in Broadcasting to CONX CORP. (“CONX”), subject to the satisfaction of customary closing conditions, including the receipt of required regulatory approvals. After the closing of the transaction, it is expected that CONX will own approximately 75% of Broadcasting and INNOVATE will own approximately 25% of Broadcasting through HC2 Holdco.
"We view this transaction as an important step forward in addressing INNOVATE’s capital structure while reinforcing our strategic priorities,” said Paul Voigt, Interim CEO of INNOVATE. "Broadcasting and its subsidiaries have successfully acquired and built 260 TV broadcast television stations since 2017, with considerably more underway. Today the segment operates the largest portfolio of Class A and LPTV licenses in the country, distributing more than 50 broadcast networks in over 40 states."
Refinancing Transaction
Broadcasting entered into a $105 million loan agreement (the “New Loan”) with HC2 Merger Sub, LLC, a subsidiary of CONX (“Merger Sub”). The proceeds of the New Loan were used to fully satisfy Broadcasting’s existing 8.50% and 11.45% notes, to fund the repurchase of certain equity interests held by Broadcasting’s noteholders, and to pay related transaction costs. The New Loan and interest accrued thereon are expected to be extinguished as consideration in the Merger and will not require cash repayment upon closing of the merger. The New Loan matures on May 29, 2027, subject to earlier acceleration in accordance with its terms.
Merger Agreement
INNOVATE has entered into a merger agreement pursuant to which Merger Sub will merge with and into Broadcasting, with Broadcasting as the surviving corporation. As a result of the merger, after the closing it is expected that CONX will own approximately 75% of Broadcasting and INNOVATE will own approximately 25% of Broadcasting through HC2 Holdco.
As part of the merger, CONX has agreed to provide Broadcasting with an equity commitment of up to $75 million to be funded after closing of the merger, subject to reduction for post-closing purchase price adjustments, and certain expense and indemnification obligations, and the New Loan and interest accrued thereon will be extinguished upon closing of the merger.
For an 18-month period from and after the closing date, INNOVATE will have the option to purchase up to 15% of Broadcasting’s ownership, on a fully diluted basis, from CONX. The transaction has been approved by the Boards of Directors of each of INNOVATE and CONX.
In connection with the merger agreement, CONX, INNOVATE and an affiliate of CONX (the “CONX Affiliate”) have also entered into a letter agreement pursuant to which CONX and INNOVATE have granted the CONX Affiliate an option, exercisable for a period of two years from the date of the letter agreement, to acquire up to 80.1% of the equity interests of Broadcasting on a fully-diluted basis. If the CONX Affiliate exercises such option, the CONX Affiliate would first acquire all of the equity interests of Broadcasting held by CONX, together with an additional amount of equity
interests from INNOVATE necessary to reach the 80.1% threshold, subject to INNOVATE's right to require the CONX Affiliate to first acquire all of INNOVATE’s remaining equity interests in Broadcasting.
For more information, please refer to the Form 8-K that will be filed by INNOVATE with the U.S. Securities and Exchange Commission (the “SEC”).
About INNOVATE
INNOVATE Corp. is a portfolio of best-in-class assets in three key areas of the new economy. Dedicated to stakeholder capitalism, INNOVATE employs approximately 3,700 people across its subsidiaries. For more information,
please visit: http://www.innovatecorp.com.
About Broadcasting
Broadcasting and its subsidiaries strategically acquire and operate over-the-air broadcasting stations across the United States.
About CONX CORP.
CONX is a diversified operating entity seeking opportunities to power the next generation of innovators in communications and connectivity. CONX’s mission is to partner with emerging companies with quality management and strong and differentiated business models with the ability to scale quickly.
Advisors
Cleary Gottlieb Steen & Hamilton LLP is serving as legal advisor to the Company. Dundon Advisers LLC is serving as financial advisor to the Company.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the federal securities laws with respect to the proposed merger of Broadcasting and Merger Sub, including, but not limited to, statements regarding: the proposed merger and the anticipated timing of the closing thereof; the refinancing transaction and the terms thereof; the expected benefits of the transaction to INNOVATE and its stockholders; the equity commitment from CONX and the anticipated use and timing of funding thereof; the expected ownership structure following the merger; INNOVATE’s option to purchase additional ownership; the business, operations and prospects of Broadcasting and its subsidiaries following the merger; the development of ATSC 3.0 and 5G capabilities; and INNOVATE’s strategies with respect to its capital structure. These forward-looking statements generally are identified by the words “believe,” “expect,” “anticipate,” “strategy,” “future,” “opportunity,” “may,” “will,” and similar expressions. Forward-looking statements are based on current expectations and assumptions and are subject to risks and uncertainties. You are cautioned that these statements are not guarantees of future performance and that INNOVATE’s actual results may differ materially from those set forth in the forward-looking statements.
Many factors could cause actual results to differ materially from these forward-looking statements, including, but not limited to: (i) the failure to complete the proposed merger on anticipated terms and timing or at all; (ii) the failure to obtain FCC approval or other required regulatory approvals in a timely manner or at all, or the imposition of conditions in connection with such approvals; (iii) the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement or an acceleration of the New Loan; (iv) the effect of the announcement or pendency of the transaction on INNOVATE’s or Broadcasting’s business; (v) macroeconomic conditions and (vi) the other risks and uncertainties under the heading “Risk Factors” set forth in INNOVATE’s Annual Report on Form 10-K, as supplemented by INNOVATE’s quarterly reports on Form 10-Q, and other filings with the SEC. Such filings are available on INNOVATE’s website or at
www.sec.gov. You should not place undue reliance on these forward-looking statements, which are made only as of the date of this press release. INNOVATE undertakes no obligation to publicly update or revise these forward-looking statements to reflect subsequent developments, events, or circumstances, except as may be required under applicable securities laws.
Investor Contact:
Solebury Strategic Communications Anthony Rozmus
(212) 235-2691
Email: ir@innovatecorp.com
FAQ
What transaction did INNOVATE Corp. (VATE) announce with CONX Corp.?
INNOVATE announced a merger in which a CONX subsidiary will merge with Broadcasting. After closing, CONX is expected to own about 75% of Broadcasting and INNOVATE about 25%, subject to customary conditions and required regulatory approvals.
How does the $105 million New Loan affect INNOVATE’s Broadcasting segment?
Broadcasting entered a $105 million New Loan from a CONX subsidiary. Proceeds fully satisfied its 8.50% and 11.45% notes, funded certain equity repurchases, and paid transaction costs. The loan matures in one year but is expected to be extinguished as merger consideration at closing.
What equity commitment is CONX providing to Broadcasting in the INNOVATE deal?
As part of the merger, CONX agreed to provide Broadcasting with an equity commitment of up to $75 million. This funding is to be provided after closing, subject to post‑closing purchase price adjustments and specified expense and indemnification obligations under the merger terms.
What options does INNOVATE have to increase its stake in Broadcasting after the merger?
For 18 months after closing, INNOVATE, through HC2 Holdco, may purchase up to 15% of Broadcasting’s ownership from CONX on a fully diluted basis. The number of interests acquired depends on an agreed equity valuation and minimum exercise amounts defined in the option agreement.
What option did the CONX Affiliate receive in relation to INNOVATE’s Broadcasting unit?
A CONX Affiliate received a two‑year option to acquire up to 80.1% of Broadcasting’s equity on a fully diluted basis. If exercised, it would first buy CONX’s entire stake, then additional interests from INNOVATE, subject to INNOVATE’s right to require purchase of its remaining interests.
How were INNOVATE’s existing notes and credit agreement modified for this transaction?
INNOVATE entered supplemental indentures for its 10.500% Senior Secured Notes due 2027 and 9.5% Convertible Senior Secured Notes due 2027, and a ninth amendment to its MSD Credit Agreement. These changes adjusted definitions, covenants, and provided consents and waivers for the merger and New Loan.