Pursuant to the terms of the merger, Liberty Digital stockholders would receive 0.25 shares of Liberty Media Corporation Series A common stock for each share of Liberty Digital, Inc. Series A common stock held. Liberty Media currently owns all of the issued and outstanding shares of Liberty Digital, Inc. Series B common stock.
Because Liberty Media owns in excess of 90% of the outstanding common stock of Liberty Digital, the merger, which is intended to be tax free, is expected to be accomplished as a short form merger under Delaware law. As a result, neither the approval of Liberty Digital’s Board of Directors nor its public stockholders are required to effect the merger; however, statutory appraisal rights will be available to stockholders of Liberty Digital who elect to assert such rights. Accordingly, there are no significant conditions to closing and closing is expected during the first quarter of 2002.
Liberty Digital was originally created in 1999 when Liberty Media contributed certain of its rights related to and investments in interactive programming and content businesses to Liberty Digital’s predecessor, TCI Music, Inc. Liberty Digital’s principal operating activities are conducted through its 56% ownership interest in DMX/AEI MUSIC, Inc. and its 50% ownership interest in The Game Show Network. Liberty Digital also has ownership interests in a number of diversified new media companies primarily focused on the development of interactive television programming, interactive television technology, e-commerce and content. Liberty Media currently owns approximately 92% of the issued and outstanding stock of Liberty Digital.
