8-KRegulation FDOther EventsExhibits & Filings

Liberty Media Corp 8-K Report, Temporary Suspension of Trading Under Employee Benefit Plans (Oct 10, 2014)

Filed October 10, 2014For Securities:FWONKFWONAFWONB

Summary

Liberty Media Corporation (FWONK) filed an 8-K on October 10, 2014, primarily to announce a temporary trading suspension for its executive officers and directors, and related persons, under employee benefit plans. This "blackout" period, effective from October 30, 2014, to November 7, 2014, is necessitated by an upcoming spin-off of its wholly-owned subsidiary, Liberty Broadband Corporation. The blackout aligns with Sarbanes-Oxley Act (SOX) regulations and prevents insider trading of Liberty Media or Liberty Broadband securities during this critical transition phase. The filing also disclosed that the Liberty Media Board of Directors finalized the record and distribution dates for the Liberty Broadband spin-off on October 9, 2014. This led to a slight delay in notifying relevant parties about the blackout period, which the company attributed to "reasonable control" and unforeseeability. The spin-off involves the distribution of Series A and Series C common stock of Liberty Broadband to respective Liberty Media shareholders. Additionally, the company provided notice regarding an adjustment to the conversion rate of its 1.375% Cash Convertible Senior Notes due 2023, a detail also covered in an October 9, 2014 press release.

Key Highlights

  • 1Liberty Media is imposing a SOX-compliant "blackout" period on trading of its securities and those of Liberty Broadband by its officers, directors, and related persons.
  • 2The blackout period is scheduled to run from October 30, 2014, at 4:00 p.m. ET, to approximately November 7, 2014.
  • 3The primary reason for the blackout is to facilitate the spin-off of Liberty Broadband Corporation, a wholly-owned subsidiary.
  • 4The spin-off involves the distribution of Series A and Series C common stock of Liberty Broadband to holders of Liberty Media's corresponding stock classes.
  • 5A press release on October 9, 2014, detailed the record and distribution dates for the spin-off and rights offering, as well as expected trading symbols for Liberty Broadband.
  • 6Liberty Media also announced an adjustment to the conversion rate of its 1.375% Cash Convertible Senior Notes due 2023, in connection with the spin-off.
  • 7The company cited a delay in determining spin-off dates as the reason for the late notification of the blackout period, stating it was beyond their reasonable control.

Frequently Asked Questions

The 'blackout' period is a temporary suspension of trading imposed on Liberty Media's executive officers, directors, and related persons. It is required by Section 306(a) of the Sarbanes-Oxley Act (SOX) and prevents these individuals from buying, selling, or transferring equity securities of Liberty Media or Liberty Broadband during a period leading up to and including the spin-off of Liberty Broadband.

The filing states the spin-off is being undertaken to distribute shares of Liberty Broadband Corporation, a wholly-owned subsidiary, to holders of Liberty Media's Series A and Series C common stock. The exact strategic reasons for the spin-off are not detailed in this particular 8-K, but it indicates a restructuring involving a key subsidiary.

In connection with the spin-off, Liberty Media is adjusting the conversion rate for its 1.375% Cash Convertible Senior Notes due 2023. The company provided notice of this pending adjustment on October 9, 2014, and will issue a second notice once the actual adjustment is made.

Liberty Media stated that the Board of Directors was unable to meet and determine the record and distribution dates for the spin-off until October 9, 2014. This delay in determining the spin-off dates, in turn, delayed the determination of the blackout period dates, preventing the company from sending the required SOX notice until October 10, 2014. The company characterized this delay as being beyond their reasonable control and unforeseeable.