Satellite : DIRECTV Gets Ready to Spin

[robby3333]

DIRECTV Gets Ready to Spin
10/27/2009 @ 6:22 PM

DIRECTV moved one step closer to a spin-off/merger with Liberty Entertainment yesterday as the IRS issued a much-expected private letter blessing the tax-free nature of the transaction. Liberty Entertainment (LEI) is currently a wholly owned subsidiary of Liberty Media. According to the IRS’ ruling, the LEI split off will qualify “as a tax-free transaction under sections 355 and 368(a)(1)(D) of the Internal Revenue Code of 1986.”

The split off now goes to a shareholder vote on November 19. Since virtually no one expects the vote to go against Liberty, the split and the merger should come to fruition quickly. The merger would combine DIRECTV with Liberty’s regional sports nets plus gaming company FUN Technologies and other assets. The combination is expected to help boost Liberty Entertainment’s market value, which has been a key goal of the transaction.•