News Corp in $11 Billion Exchange with Liberty Media
December 22, 2006
Cleary Gottlieb is representing Goldman, Sachs & Co. and J.P. Morgan Securities, Inc., as financial advisors to News Corporation, in the exchange by News of its 38.4% stake in The DIRECTV Group, three Regional Sports Networks, and $550 million of cash for Liberty Media’s entire 16.3% economic position in News, which has a market value of $11 billion and includes 18% of News’ voting power. The transaction, announced December 22, 2006, is subject to regulatory approvals, the receipt of an IRS ruling, and an affirmative vote by a majority of the holders of News voting stock, other than the Murdoch family and Liberty. If approved, the transaction is expected to close in the second half of 2007.
In connection with this transaction, Liberty and News are entering into standstill agreements and News has announced its intention to redeem its stockholder rights plan and consider elimination of its staggered board. Cleary Gottlieb had also represented the financial advisors to News when Liberty made its initial acquisition of News voting stock in 2004 and News responded by adopting a stockholder rights plan.
News Corporation, with total assets of approximately $58 billion and total annual revenues of approximately $26 billion, is a diversified entertainment company with global operations, including filmed entertainment, television, cable network programming, direct broadcast satellite television, magazines and inserts, newspapers, and book publishing.
Liberty Media Corporation owns a broad range of electronic retailing, media, communications and entertainment businesses and investments, including interests in QVC, Provide Commerce, IAC/InterActiveCorp, Expedia, Starz Entertainment, News Corporation, and Time Warner.
DIRECTV, Inc., the leading satellite television service provider in the U.S., has more than 15.6 million customers.