News Corporation and Liberty Media Corporation Sign Share Exchange Agreement
Friday December 22, 9:00 am ET
NEW YORK--(BUSINESS WIRE)--News Corporation today announced that it had signed a share exchange agreement with Liberty Media Corporation.
Under the terms of the agreement, Liberty will exchange its entire 16.3 percent economic position (324.6 million Class A and 188 million Class B shares) in News Corporation for a 38.4 percent stake (470.4 million shares) in The DIRECTV Group, three Regional Sports Networks (FSN Northwest, FSN Pittsburgh and FSN Rocky Mountain) and $550 million of cash, subject to a working capital adjustment.
News Corporation believes the transaction will unlock tremendous value for the following reasons:
The transaction will be immediately accretive to News Corporation's earnings per share;
News Corporation will divest its stake in DIRECTV at an attractive valuation on a tax-free basis, and;
News Corporation will accomplish an approximately $11 billion stock buyback representing approximately 16 percent of the outstanding stock.
The share exchange agreement is subject to various regulatory approvals and an affirmative vote by a majority of holders of News Corporation's Class B common stock, other than the Murdoch family and Liberty. If approved, the transaction is expected to be completed in the second half of calendar 2007.
Following completion of the transaction with Liberty, News Corporation intends to redeem its stockholder rights plan and will consider eliminating its staggered board.
With negotiations over the share exchange agreement now completed, News Corporation expects to continue its previously announced stock repurchase program.
News Corporation (NYSE: NWS - News, NWS.A - News; ASX: NWS - News, NWSLV - News) had total assets as of September 30, 2006 of approximately US$58 billion and total annual revenues of approximately US$26 billion. News Corporation is a diversified entertainment company with operations in eight industry segments: filmed entertainment; television; cable network programming; direct broadcast satellite television; magazines and inserts; newspapers; book publishing; and other. The activities of News Corporation are conducted principally in the United States, Continental Europe, the United Kingdom, Australia, Asia and the Pacific Basin. |
