01—Abstract
Summary
Summary of the 8-K filed April 16, 2019. Cited figures are marked; the original filing is the authoritative source.
Expedia Group, Inc. (EXPE) announced on April 16, 2019, that it has entered into a definitive Agreement and Plan of Merger with Liberty Expedia Holdings, Inc. (LEXPE).
This transaction involves a two-step merger process, ultimately making LEXPE a wholly-owned subsidiary of Expedia Group. The primary asset of LEXPE is approximately 23.9 million shares of Expedia Group's capital stock, including all of its Class B common stock. This merger aims to simplify Expedia Group's corporate structure and consolidate ownership of its stock previously held by LEXPE.
The merger consideration for LEXPE shareholders will be 0.36 shares of Expedia Group common stock per LEXPE share, plus cash for fractional shares. Upon completion, former LEXPE shareholders are expected to hold approximately 14%a of Expedia Group's outstanding common and Class B common stock.
The transaction is subject to customary closing conditions, including regulatory approvals (like HSR Act) and shareholder approval from LEXPE. The agreement also outlines provisions regarding non-solicitation, termination fees, and changes to board composition, including the expected resignation of LEXPE-nominated directors from Expedia Group's board.
02—Key points
Key Highlights
- Expedia Group (EXPE) to acquire Liberty Expedia Holdings, Inc. (LEXPE) through a two-step merger.
- LEXPE's principal asset is approximately 23.9 million shares of Expedia Group stock, including all Class B shares.
- Shareholders of LEXPE will receive 0.36 shares of EXPE common stock per LEXPE share, plus cash for fractional shares.
- Upon closing, former LEXPE shareholders are expected to own approximately 14% of EXPE's total outstanding common and Class B shares.
- The transaction is subject to LEXPE shareholder approval and customary closing conditions, including HSR Act approval.
- John C. Malone and Leslie Malone have agreed to vote their significant stake in LEXPE in favor of the merger.
- Barry Diller and The Diller Foundation will exchange shares of EXPE common stock for Class B common stock, impacting voting power and governance arrangements.
- The merger is expected to simplify Expedia Group's corporate structure.
03—Questions
Frequently Asked Questions
What is the primary purpose of this merger agreement between Expedia Group and Liberty Expedia Holdings, Inc.?
The primary purpose of the merger agreement is to simplify Expedia Group's corporate structure by consolidating the ownership of its stock that is currently held by Liberty Expedia Holdings, Inc. (LEXPE). LEXPE's main asset is a significant stake in Expedia Group's own stock, and this transaction will effectively bring that stake back under Expedia Group's direct control.
What will LEXPE shareholders receive in exchange for their shares?
LEXPE shareholders will receive 0.36 shares of Expedia Group common stock for each share of LEXPE common stock they hold, plus cash in lieu of any fractional shares. This exchange will result in former LEXPE shareholders collectively owning approximately 14% of Expedia Group's outstanding common and Class B common stock.
Are there any significant voting agreements in place related to this merger?
Yes, John C. Malone and Leslie Malone, collectively the 'Malone Group,' have entered into a voting agreement committing to vote their shares of LEXPE common stock (representing approximately 32% of LEXPE's voting power) in favor of the merger agreement. This is a key support for the transaction's approval by LEXPE stockholders.
How does this transaction affect Barry Diller's control and governance at Expedia Group?
The transaction involves Barry Diller and The Diller Foundation exchanging Expedia Group common stock for Expedia Group Class B common stock. A new governance agreement allows Mr. Diller to potentially increase his control over the voting power of Expedia Group through the acquisition of additional Class B shares. However, the new governance agreement also introduces certain automatic conversion provisions for these Class B shares into common stock under specific circumstances (e.g., death, disability, cessation of executive role) and restrictions on change-of-control transactions, which differ from previous arrangements.
04—Continue