Filing Details

 

	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549

 

 

SCHEDULE 13D/A

(Amendment No. 2)

 

Under the Securities Exchange Act of 1934

(Name of Issuer)

 

(Title of Class of Securities)

 

(CUSIP Number)

 

(Name, Address and Telephone Number of Persons
Authorized to Receive Notices and Communications)

 

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. o

 

The information required on the remainder of this cover page shall not be deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934 (Act) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 

 

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(1)              The Proxy and Voting Agreement, dated as of November 4, 2016, by and among John C. Malone (Mr. Malone), Leslie Malone (Mrs. Malone, and together with Mr. Malone, the Malone Group) and Barry Diller (Mr. Diller) contains provisions relating to the voting and disposition of Series A common stock, par value $0.01 per share (the Series A Common Stock), and Series B common stock, par value $0.01 per share (the Series B Common Stock), of Liberty Expedia Holdings, Inc. (the Issuer) held by the Malone Group. See Item 6.

 

(2)              Includes 52,828 shares of Series A Common Stock and 82,565 shares of Series B Common Stock held by Mr. Malones wife, Mrs. Malone, as to which shares Mr. Malone disclaims beneficial ownership.

 

(3)              Includes (i) 273,431 shares of Series A Common Stock pledged to Fidelity Brokerage Services, LLC (Fidelity) in connection with a margin loan facility extended by Fidelity and (ii) 131,228 shares of Series A Common Stock pledged to Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) in connection with certain margin loan facilities extended by Merrill Lynch.

 

(4)              Does not include shares of Series A Common Stock issuable upon conversion of shares of Series B Common Stock beneficially owned by Mr. Malone as noted above; however, if such shares of Series A Common Stock were included, Mr. Malone would have beneficial ownership of 3,085,442 shares of Series A Common Stock and Mr. Malones aggregate beneficial ownership of Series A Common Stock, as a series, would be approximately 5.4%, subject to the relevant footnotes set forth herein.

 

(5)              Includes 44,455 shares of Series B Common Stock held by two trusts (the Trusts) which are managed by an independent trustee and of which the beneficiaries are Mr. Malones adult children. Mr. Malone has no pecuniary interest in the Trusts, but he retains the right to substitute assets held by the Trusts. Mr. Malone disclaims beneficial ownership of the shares held by the Trusts.

 

(6)              For purposes of calculating beneficial ownership of Mr. Malone, the total number of shares of Series A Common Stock outstanding was 54,496,214 and the total number of shares of Series B Common Stock outstanding was 2,830,174, in each case, as of December 31, 2018, based on information provided by the Issuer and as calculated in accordance with Rule 13d-3.  Each share of Series B Common Stock is convertible, at the option of the holder, into one share of Series A Common Stock. Generally, each share of Series A Common Stock is entitled to one vote, whereas each share of Series B Common Stock is entitled to ten votes. Accordingly, Mr. Malone may be deemed to beneficially own voting equity securities representing approximately 32.9% of the voting power of the Issuer based on the outstanding shares noted above. See Item 5.

 

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 13D/A

(Amendment No. 2)

 

Statement of

 

JOHN C. MALONE

 

Pursuant to Section 13(d) of the Securities Exchange Act of 1934

in respect of

 

LIBERTY EXPEDIA HOLDINGS, INC.

 

This Report on Schedule 13D relates to the Series A common stock, par value $0.01 per share (the Series A Common Stock) and Series B common stock, par value $0.01 per share (the Series B Common Stock and, together with the Series A Common Stock, the Common Stock) of Liberty Expedia Holdings, Inc., a Delaware corporation (the Issuer).  The Report on Schedule 13D originally filed with the Securities and Exchange Commission (the SEC) by the Reporting Person, Mr. John C. Malone (Mr. Malone or the Reporting Person), on November 14, 2016, as amended by Amendment No. 1 to this Schedule 13D filed with the SEC on March 7, 2018 (the Schedule 13D), is hereby amended and supplemented to include the information set forth herein.

 

This amended statement on Schedule 13D/A (this Amendment) constitutes Amendment No. 2 to the Schedule 13D (the Schedule 13D, as amended by the Amendment, collectively, the Statement). Capitalized terms not defined herein have the meanings given to such terms in the Schedule 13D.  Except as set forth herein, the Schedule 13D is unmodified.

 

Item 4. Purpose of the Transaction

 

The information contained in Item 4 of the Schedule 13D is hereby amended to add the following information at the end of such Item:

 

The Reporting Person has been informed that, on February 1, 2019, a member of management of Expedia Group, Inc. a Delaware corporation (Expedia), as authorized by a special committee of disinterested directors formed by the Board of Directors of Expedia (the Special Committee), conveyed to a member of Issuer management a proposal for Expedia to acquire the outstanding shares of the Issuer in a business combination transaction in which the outstanding shares of Series A Common Stock and Series B Common Stock would be exchanged for newly issued shares of common stock, par value $0.0001 per share, of Expedia (the Expedia Common Stock).  Over the course of the next two days, the member of Expedia management, as authorized by the Special Committee, and the member of Issuer management, as authorized by a committee of the Board of Directors of the Issuer, composed of all of Issuers Common Stock Directors (the Transaction Committee), engaged in discussions regarding a possible exchange ratio for the transaction.

 

As of the filing of this Amendment, the member of Expedia management had last proposed a possible exchange ratio of 0.347 of a share of Expedia Common Stock for each outstanding share of Series A Common Stock and Series B Common Stock (the Expedia Proposal), subject to the negotiation of mutually acceptable transaction agreements.  In connection with conveying the Expedia Proposal, the member of Expedia management also communicated that the Special Committee had not authorized making any proposal to the Issuer with a higher exchange ratio. Based on a total of 54,496,214 shares of Series A Common Stock and 2,830,174 shares of Series B Common Stock outstanding on December 31, 2018, the Expedia Proposal would involve the issuance by Expedia of an aggregate of 19,892,257 shares of Expedia Common Stock in respect of all outstanding shares of Common Stock.  The Issuer beneficially owns 11,076,672 shares of Expedia Common Stock and 12,799,999 shares of Class B common stock, par value $0.0001 per share, of Expedia (the Expedia Class B Common Stock).

 

Also, as of the filing of this Amendment, the member of Issuer management had last proposed a possible exchange ratio of 0.373 of a share of Expedia Common Stock for each outstanding share of Series A Common Stock and Series B Common Stock (the LEXE Proposal), subject to the negotiation of mutually acceptable transaction agreements.  In connection with conveying the LEXE Proposal, the member of Issuer management also communicated that the Transaction Committee had not authorized making any proposal to Expedia with a lower exchange ratio. Based on the number of outstanding shares of Common Stock on December 31, 2018, the LEXE Proposal would involve the issuance by Expedia of an aggregate of 21,382,743 shares of Expedia Common Stock in respect of all outstanding shares of the Issuers Common Stock.

 

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In addition, in connection with the consummation of any such transaction, as would be permitted under certain circumstances by the governance and shareholder agreements relating to Expedia currently in effect, Mr. Barry Diller expects to exchange shares of Expedia Common Stock beneficially owned by him for shares of Expedia Class B Common Stock currently owned by the Issuer and a charitable foundation formed by Mr. Diller may likewise exchange shares of Expedia Common Stock it owns for shares of Expedia Class B Common Stock currently owned by the Issuer, and that Mr. Diller and Expedia may enter into certain amendments to the governance agreement currently in effect relating to Mr. Dillers ability to exchange for or purchase in the future additional shares of Expedia Class B Common Stock, as well as other governance arrangements and transfer restrictions.  Such exchange would not affect the consideration to be paid in any potential transaction between the Issuer and Expedia.

 

The Reporting Person expects that there may be continued discussions among the parties regarding a potential transaction and related matters, including the terms of any continuing governance agreement between Mr. Diller and Expedia.  There can be no assurance that any discussions that may occur among Mr. Diller, Expedia, the Issuer and/or the Special Committee or the Transaction Committee will contain transaction terms consistent with those described above, or result in the entry into a definitive agreement concerning a transaction (or the terms and conditions thereof) or, if such a definitive agreement is reached, will result in the consummation of a transaction provided for in such definitive agreement.  Discussions concerning a possible transaction may be terminated at any time and without prior notice.

 

The Reporting Person does not intend to disclose developments with respect to the foregoing unless and until the Boards of Directors of the Issuer and Expedia have approved a specific transaction, if any, except as may be required by law.

 

Item 5.   Interest in Securities of the Issuer

 

Item 5 of the Schedule 13D is amended and restated in its entirety to read as follows:

 

(a) - (b) Mr. Malone beneficially owns (i) 404,659 shares of Series A Common Stock (including 52,828 shares held by his wife as to which shares Mr. Malone disclaims beneficial ownership) and (ii) 2,680,783 shares of Series B Common Stock (including (A) 82,565 shares held by his wife, as to which Mr. Malone disclaims beneficial ownership, and (B) 44,455 shares held by two trusts which are managed by an independent trustee (the Trusts), the beneficiaries of which are Mr. Malones adult children, as to which shares Mr. Malone disclaims beneficial ownership). The shares of Series A Common Stock and Series B Common Stock beneficially owned by Mr. Malone constitute (x) less than 1% of the outstanding shares of Series A Common Stock, based on 54,496,214 shares of the Issuers Series A common stock outstanding on December 31, 2018,  and (y) approximately 94.7% of the outstanding shares of Series B Common Stock, based on 2,830,174 shares of the Issuers Series B Common Stock outstanding on December 31, 2018. Generally, the holders of Series B Common Stock are entitled to 10 votes per share and the holders of Series A Common Stock are entitled to one vote per share (other than the election or removal of Common Stock Directors prior to the Series B Director Termination Time, in which case each share of Series A Common Stock entitles its holder to one vote per share and each share of Series B Common Stock entitles its holder to two votes per share). Accordingly, Mr. Malone may be deemed to beneficially own voting equity securities representing approximately 32.9% of the voting power of the Issuer based on the outstanding shares noted above.

 

Pursuant to the Malone Proxy, Mr. Malone and Mrs. Malone (together, the Malone Group) have granted to Barry Diller (Mr. Diller) an irrevocable proxy to vote the shares of Common Stock owned by the Malone Group until the Proxy Arrangement Termination Date, subject to certain exceptions. The Malone Proxy also contains provisions relating to the ownership and disposition of the Malone Groups shares of Common Stock. See the description of the Malone Proxy in Item 6 to the Statement, which is incorporated herein by reference.

 

The Trusts hold 44,455 shares of Series B Common Stock, as to which shares Mr. Malone has no pecuniary interest and disclaims beneficial ownership. The shares of Series B Common Stock held by the Trusts are not subject to the Malone Proxy. To Mr. Malones knowledge, the Trusts have the sole power to vote and to dispose of, or to direct the voting or disposition of, the shares of Series B Common Stock held by the Trusts, except that Mr. Malone is permitted under the terms of the Trusts to substitute assets in the Trusts and thereby may acquire shares held in the Trusts at any time.

 

(c) Except as provided in this Amendment, neither Mr. Malone nor, to his knowledge, his wife or the Trusts, has executed any transactions in respect of the Common Stock within the last sixty days.

 

(d) Not applicable.

 

(e) Not applicable.

 

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SIGNATURES

 

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct.

 

Dated: February 4, 2019
	By:	/s/ John C. Malone
		John C. Malone

 

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