Cleary Gottlieb is representing Goldman Sachs as financial advisor to Liberty Media Corporation in connection with the split-off of its subsidiary, Liberty Entertainment, and follow-on merger of Liberty Entertainment with DIRECTV Group.
Liberty Entertainment will become a stand-alone public company with high and low vote shares as a result of the exchange of the high and low vote series of Liberty Entertainment stock for 90% of the high and low vote series of Liberty Media’s NASDAQ-listed entertainment tracking stock. Thereafter, the high and low vote series of Liberty Entertainment stock will convert into low vote shares of a new holding company, DIRECTV, at an exchange ratio of 1.11111, while the shares of DIRECTV Group will convert into shares of DIRECTV at an exchange ratio of 1.0. Separately, the high and low vote series of Liberty Entertainment stock held by Dr. John C. Malone and related persons will convert into a special series of high vote shares of DIRECTV.
The merger is subject to the prior consummation of the split-off, regulatory approvals, the receipt of an IRS ruling, and shareholder approvals at both DIRECTV Group and Liberty Media, including a special approval of the split-off and the merger by a majority of the holders of Liberty Entertainment tracking stock other than Dr. Malone and his related persons. The merger is expected to close in the fourth quarter of 2009.
The DIRECTV Group, a leading provider of digital television entertainment services, has more than 17.6 million customers in the United States and 5.6 million customers in Latin America.
Liberty Media Corporation owns interests in a broad range of electronic retailing, media, communications and entertainment businesses, including interests in QVC, Provide Commerce, Expedia, The DIRECTV Group, Starz Entertainment, Time Warner and Sprint Nextel. Those interests are attributed to three tracking stock groups: the Liberty Interactive group, the Liberty Entertainment group and the Liberty Capital group.
