Fusion Corporate Partners

InterMedia Partners are to merge Cine Latino and InterMedia Español Holdings, which includes WAPA America and WAPA TV, with Azteca Acquisition Corporation in a transaction valued at approximately $400 million. InterMedia currently owns Cinelatino with Cinema Aeropuerto, S.A. de C.V., an indirect, wholly-owned subsidiary of Grupo MVS, S.A. de C.V., and James McNamara. The new company will be called Hemisphere Media Group, and will be a pure-play U.S. Hispanic TV/cable networks and content platform.

Following completion, Peter Kern, Managing Partner of InterMedia, will serve as Chairman of Hemisphere Media Group. Alan J. Sokol, Senior Partner of InterMedia will become Chief Executive Officer. Craig Fischer, who works with Sokol at InterMedia, will become Chief Financial Officer. Gabriel Brener, CEO of Azteca Acquisition Corporation, and Sokol will become Directors of the new company.

Hemisphere will be headquartered in Miami, Florida.

Summary of the transaction

Under the terms of the proposed business combination, Azteca, WAPA and Cinelatino will each become indirect wholly-owned subsidiaries of Hemisphere. Pursuant to the Merger Agreement,

• each share of Azteca common stock will be converted into one share of Hemisphere Class A common stock (which will be entitled to one vote per share);
• the outstanding membership interests of WAPA and the outstanding common shares of Cinelatino common stock will be converted into an aggregate of 30.0 million shares of Hemisphere Class B common stock (which will be entitled to ten votes per share), valued at approximately $300 million, plus an additional 3.0 million shares of Hemisphere Class B common stock subject to certain forfeiture provisions if the market price of Hemisphere Class A common stock does not reach certain levels, and $5 million in cash;
• 250,000 shares of Azteca common stock held by certain Azteca officers will be cancelled and an additional 250,000 shares held by the Azteca sponsor will be subject to forfeiture if the market price of Hemisphere Class A common stock does not reach certain levels; and
• in exchange for cash consideration, all current holders of Azteca’s warrants will be asked to amend their warrants such that there will be approximately 50% less Hemisphere Class A common stock issued upon warrant exercise.

The Hemisphere Class A common stock and Hemisphere Class B common stock issued in the business combination will have the same rights and obligations, except that Hemisphere Class A common stock will be entitled to one vote per share while the Hemisphere Class B common stock will be entitled to ten votes per share. Assuming no redemptions by Azteca stockholders and no repurchases by Azteca of Azteca common stock from the public stockholders, immediately following the consummation of the business combination, current Azteca stockholders (including Azteca’s founders) will own approximately 27% of Hemisphere and the WAPA Member and Cinelatino stockholders will own, together, approximately 73% of Hemisphere immediately following the closing (excluding the shares subject to forfeiture provisions and Azteca warrants).

Hemisphere intends to apply for listing of the shares of Hemisphere Class A common stock on the NASDAQ Capital Market.

Deutsche Bank Securities Inc. and Maxim Group LLC are acting as capital markets and financial advisors to Azteca Acquisition Corporation. Morgan Stanley & Co. LLC is acting as financial advisor to InterMedia Partners. Greenberg Traurig, LLP is acting as legal advisor to Azteca Acquisition Corporation, and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to InterMedia Partners. Stan Budeshtsky is acting as a consultant to Azteca Acquisition Corporation.

USA, New York, NY & Miami, FL