LodgeNet to Acquire On Command
SIOUX FALLS, SD, December 13, 2006. LodgeNet Entertainment Corporation (Nasdaq: LNET) announced today it has entered into a definitive agreement with Liberty Media Corporation and its Liberty Satellite & Technology, Inc. subsidiary (together "Liberty") to purchase all of the capital stock of Ascent Entertainment Group, Inc., the owner of 100% of the capital stock of On Command Corporation for $380 million.
The purchase price will be paid at closing by the issuance of 2.05 million shares of LodgeNet common stock and $332 million in cash. Financing for the acquisition is being provided by Bear Stearns & Co. and Credit Suisse. At closing, Liberty will own approximately 9.9% of LodgeNet's common stock. The transaction, which is expected to close in mid-2007, is subject to customary closing conditions.
On Command Corporation, based in Denver, Colorado, provides interactive media services to approximately 830,000 hotel rooms throughout the United States, Canada, and Mexico. It also owns 80% of the capital stock of The Hotel Networks, Inc., the distributor of advertising-supported, satellite- delivered television programming to approximately 300,000 rooms throughout the United States. During 2006, On Command is expected to generate revenue of more than $225 million and Adjusted Operating Cash Flow of approximately $58 million.
"This is a compelling transaction across all strategic, operating, and financial aspects," said Scott C. Petersen, LodgeNet President and CEO. "This is another significant step forward in the execution of our strategy to expand our networks and integrate a broader range of solutions for our customers. On Command is an outstanding organization with an impressive array of hotel customers, products, and services. They offer an ideal fit with our organization and should provide numerous synergies while improving our ability to generate greater value for our hotel customers and their guests."
"We operate in a rapidly changing environment and by combining our room bases, service organizations, programming teams, and engineering expertise we can better serve our lodging customers and their guests by giving them not only the most services, but also the best services," continued Petersen. "We believe that by combining talents of our two organizations, we can deliver on the evolving needs of our customers not only faster, but with better and more cost-effective technologies and solutions. We are dedicated to bringing value to the hotel industry through new content options and connectivity solutions for the guest and new revenue and brand marketing opportunities for hotels, brands, and their owners, managers, and franchisees. We remain committed to our disciplined financial approach to the business and believe that uniting these two companies will generate long-term value for our shareholders."
"We believe this transaction will better enable the delivery of a world- class, unified suite of technologies, solutions, and content for hotels and their guests," said William Fitzgerald, Senior Vice President of Liberty Media Corporation. "Additionally, the sale of On Command shows continued progress toward our stated goal of converting non-core assets attributed to the Liberty Capital Group into cash and strategic operating businesses."
"As we announced today in a separate press release, PAR Capital Management, Inc., one of our longest and largest shareholders, has agreed to make an additional strategic investment in our company to support the On Command acquisition," continued Petersen. "PAR will purchase 1,000,000 shares of common stock from LodgeNet in a private transaction for approximately $23 million." The PAR transaction will be completed in conjunction with the closing of LodgeNet's acquisition of On Command, and is subject to certain closing conditions.
Bear Stearns & Co., Inc. represented LodgeNet in the transaction. Lehman Brothers, Inc. and Daniels & Associates represented Liberty Media Corporation in the transaction. Leonard Street and Deinard, P.A. acted as legal counsel for LodgeNet.
The Company will hold a conference call on Wednesday, December 13, 2006 at 5:00 pm CST. A live webcast of the teleconference will also be available via the Internet at the InterCall website http://audioevent.mshow.com/316693/. The webcast will be archived at that site for one week and can be accessed via LodgeNet's website at http://www.lodgenet.com . Additionally, the Company has posted slides at its website under the investor relations, company presentation section, which will be referenced during the conference call.
Marriott International, Inc. (NASDAQ: MAR) is a global leading lodging company based in Bethesda,Maryland, USA, with more than 4,200 properties in 80 countries and territories. Marriott International reported revenues of nearly $14 billion in fiscal year 2014. The company operates and franchises hotels and licenses vacation ownership resorts under 19 brands, including: The Ritz-Carlton®, BVlgari®, EDITION®, JW Marriott®, Autograph Collection® Hotels, Renaissance® Hotels, Marriott Hotels®, Delta Hotels and Resorts®, Marriott Executive Apartments®, Marriott Vacation Club®, Gaylord Hotels®, AC Hotels by Marriott®, Courtyard®, Residence Inn®, SpringHill Suites®, Fairfield Inn & Suites®, TownePlace Suites®, Protea Hotels® and MoxyHotels®. Marriott has been consistently recognized as a top employer and for its superior business ethics. The company also manages the award-winning guest loyalty program, Marriott Rewards® and The Ritz-Carlton Rewards® program, which together surpass 50 million members. For more information or reservations, please visit our website at 
