DIRECTV Group Announces Receipt by Liberty Media of Private Letter Ruling Relating to Split-Off
October 27 2009 - 9:27AM
Business Wire
The DIRECTV Group, Inc. (NASDAQ: DTV) announced today that
Liberty Media Corporation (“Liberty Media”) has received a private
letter ruling from the Internal Revenue Service (“IRS”) relating to
the tax treatment of various aspects of the split-off of Liberty
Entertainment, Inc. (“LEI”), a wholly owned subsidiary of Liberty
Media, from Liberty Media (the “Split-Off”). As a result of the
Split-Off and the subsequent business combination of LEI with
DIRECTV Group (the “DTV Business Combination”), DIRECTV Group and
LEI would become wholly-owned subsidiaries of a new public company,
named “DIRECTV.” The Class A Common Stock of DIRECTV is expected to
be listed on the NASDAQ Global Select Market under DIRECTV Group’s
current ticker symbol, “DTV.”
The receipt of the private letter ruling is one of the
conditions to the completion of the Split-Off and the DTV Business
Combination, and eliminates a potential termination right in favor
of Liberty Media that previously existed under the merger
agreement. The private letter ruling provides, among other things,
that:
- the Split-Off will qualify as a
tax-free transaction under sections 355 and 368(a)(1)(D) of the
Internal Revenue Code of 1986, as amended;
- no gain or loss will be
recognized by Liberty Media upon the distribution of LEI common
stock; and
- no gain or loss will be
recognized by, and no amount will be included in the income of,
holders of Liberty Entertainment common stock upon the exchange of
shares of Liberty Entertainment common stock for shares of LEI
common stock (except with respect to cash received in lieu of
fractional shares).
In addition, the ruling provides requested guidance concerning
the impact under applicable tax-related regulations of post-closing
open market share repurchases by DIRECTV. Based on that guidance,
DIRECTV Group believes that, subject to certain limitations and
conditions, DIRECTV will be able to implement an open market share
repurchase program following the closing if and to the extent
approved by its board of directors based on prevailing market
conditions, available cash and other relevant business
considerations.
While generally binding upon the IRS, the private letter ruling
is subject to certain caveats and there are certain limitations in
relying upon private letter rulings. These caveats and limitations
are described in DIRECTV Group’s definitive proxy
statement/prospectus relating to the special meeting of holders of
DIRECTV Group’s common stock to be held in connection with the DTV
Business Combination, and filed with the Securities and Exchange
Commission.
As indicated in our prior press releases, if the proposal
relating to the DTV Business Combination receives the requisite
stockholder approval at the special meeting of DIRECTV Group
stockholders scheduled to be held on Nov. 19, 2009, then the DTV
Business Combination will be consummated on or shortly thereafter
that date, assuming all other conditions are satisfied or
waived.
Questions relating to the transactions described above should be
directed to DIRECTV Group’s information agent: Innisfree M&A
Incorporated, 501 Madison Avenue, 20th Floor, New York, NY 10022,
toll free at 877-750-5836 (banks and brokers call collect at
212-750-5833).
Cautionary Statement Concerning Forward-looking
statements
NOTE: This release may include or incorporate by reference
certain statements that we believe are, or may be considered to be,
"forward-looking statements" within the meaning of various
provisions of the Securities Act of 1933 and of the Securities
Exchange Act of 1934. These forward-looking statements generally
can be identified by use of statements that include phrases such as
"believe," "expect," "estimate," "anticipate," "intend," "plan,"
"foresee," "project" or other similar words or phrases. Similarly,
statements that describe our objectives, plans or goals also are
forward-looking statements. All of these forward-looking statements
are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical results or from
those expressed or implied by the relevant forward-looking
statement. Such risks and uncertainties include, but are not
limited to: economic conditions; government action; the outcome of
legal proceedings; and the ability of third parties to timely
perform material contracts. We urge you to consider these factors
carefully in evaluating the forward-looking statements.
Important Additional Information Filed with the SEC
Nothing in this communication shall constitute a solicitation to
buy or an offer to sell shares of Liberty Entertainment, Inc.,
DIRECTV, The DIRECTV Group, Inc. or any of the Liberty Media
tracking stocks. The offer and sale of shares in the proposed
business combination with Liberty Entertainment, Inc. will only be
made pursuant to one or more effective registration statements.
Investors and security holders are urged to carefully read the
registration statements of Liberty Entertainment, Inc. and DIRECTV
filed with the SEC, including the proxy statement/prospectuses
contained therein, because they contain important information about
these transactions. Investors and security holders are able to
obtain free copies of the registration statements and the proxy
statements/prospectuses and other documents filed with the SEC by
Liberty Entertainment, Inc., DIRECTV, Liberty Media Corporation and
The DIRECTV Group, Inc., as the case may be, through the web site
maintained by the SEC at www.sec.gov. In addition, investors and
security holders will be able to obtain free copies of the DIRECTV
registration statement from The DIRECTV Group, Inc. by contacting
The DIRECTV Group, Inc., 2230 E. Imperial Highway, El Segundo, CA
90245, Attn: Investor Relations, Telephone (310) 964-0808.
Participants in a Solicitation
DIRECTV Group and its directors and executive officers may be
deemed to be participants in the solicitation of proxies or
consents from the holders of DIRECTV Group common stock in
connection with the proposed transactions. Information about the
directors and executive officers of DIRECTV Group and their
ownership of DIRECTV Group stock is set forth in the proxy
statement/prospectus.
About the DIRECTV Group
The DIRECTV Group (NASDAQ:DTV) is the world's leading provider
of digital television entertainment services. Through its
subsidiaries and affiliated companies in the United States, Brazil,
Mexico and other countries in Latin America, the DIRECTV Group
provides digital television service to more than 18.3 million
customers in the United States and more than 6 million customers in
Latin America.
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