Robert Halmi Inc said it and Hal RoachStudios Inc signed a definitive agreement to merge in a stock
swap value at 115 mln dlrs, based on October 16 closing prices.
    The company said the agreement calls for the holders of
common stock in Hal Roach to exchange their shares on a
one-for-one basis for shares in the combined company.
    It said holders of Robert Halmi common will exchange their
shares on a two-and-one-half-for-one basis for shares in the
combined company.
    The company said the swap will be tax-free.
    The company also said &lt;Qintex Ltd>, a 35 pct owner of Hal
Roach common stock, has agreed to use the company as the
exclusive vehicle for its U.S. media and entertainment
investments, the company said.
    The company said Qintex's U.S. subsidiary also agreed to
supply a minimum 70 mln dlrs line of credit to the new company,
which shall be used, with Qintex approval, for financing new
HRI products.
    The company said that under the definitive agreement,
Qintex's U.S. division will have the right to purchase up to 51
pct of the new company in the open market, in private
transactions or by tender offer, but will not be purchasing
warrants to bring its ownership to 51 pct of the new company.
    If Qintex's U.S. subsidiary has not achieved this ownership
within one year after the completion of the merger, the
subsidiary will have the right two years thereafter to request
that HRI commence a rights offering to HRI stockholders, the
company said.
    Regarding the potential rights offering, Qintex's U.S.
subsidiary will act as standby purchaser, the company said.
    The transaction is subject to the approval of both
company's shareholders, the receipt of certain tax approvals,
and the continued employement of Robert Halmi Sr and Robert
Halmi Jr, the company said.
    Robert Halmi Sr, who is currently chairman and chief
executive officer of Robert Halmi Inc, will be chairman of the
new company and David Evans, current president and chief
operating officer of Hal Roach, will become chief executive,
the company said.
 Reuter
