UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 4, 2002
USA NETWORKS, INC.
(Exact name of Registrant as specified in charter)
Delaware 0-20570 59-2712887
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
152 West 57th Street, New York, NY 10019
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(212) 314-7300
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On February 4, 2002, USA Networks, Inc. ("USA" or the "Company")
completed its acquisition of a controlling interest in Expedia, Inc. As part of
the transaction, Expedia shareholders were given the opportunity to elect to
exchange their Expedia shares for a package of USA securities, consisting of
USA's common stock, cumulative convertible preferred stock and warrants. On
February 7, 2002, USA announced the final exchange ratios used to calculate the
number of USA securities exchanged for each Expedia share held by Expedia
shareholders who elected to exchange their shares in the transaction. Please see
the full text of the Company's press releases, filed as exhibits 99.1 and 99.2
hereto, which are incorporated herein by reference.
USA filed a registration statement (file no. 333-68120) registering the
USA securities issued in the Expedia transaction. The registration statement
contains additional information about the transaction.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits.
99.1 Press Release dated February 5, 2002.
99.2 Press Release dated February 7, 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
USA NETWORKS, INC.
By: /s/ JULIUS GENACHOWSKI
---------------------------------
Name: Julius Genachowski
Title: Executive Vice President and
General Counsel
Date: February 11, 2002
EXHIBIT INDEX
Exhibit No. Description
99.1 Press Release dated February 5, 2002.
99.2 Press Release dated February 7, 2002.
[EXPEDIA, INC. LOGO] [USA NETWORKS INC LOGO]
EXHIBIT 99.1
EXPEDIA, INC. SHAREHOLDERS APPROVE USA NETWORKS, INC. TRANSACTION
MAJORITY OWNERSHIP TRANSFERS TO USA
BELLEVUE, WASHINGTON - FEBRUARY 5, 2002 - Expedia, Inc.(NASDAQ:EXPE)
today reported that on February 4, 2002, its shareholders approved the merger
transaction in which USA Networks, Inc. (NASDAQ: USAI) became the controlling
shareholder of Expedia(R). The transaction was completed yesterday.
The transaction transfers the ownership of 33.7 million shares of
Expedia from Microsoft Corporation to USA. In addition, another 1.0 million
shares, including approximately 240,000 shares submitted via notice of
guaranteed delivery, were exchanged by other Expedia shareholders for a package
of USA securities, bringing USA's ownership in Expedia to 34.7 million shares,
or about 65% of the 53.7 million basic shares outstanding, and representing
94.9% percent of the voting interest.
On a preliminary basis, for each Expedia share, exchanging
shareholders, including Microsoft, received 0.6009 shares of USA common stock;
0.3779 shares of USA cumulative convertible preferred stock, and 0.4229 USA
warrants. In aggregate, USA issued to former shareholders of Expedia who elected
to receive USA securities approximately 20.9 million shares of USA common stock,
13.1 million shares of USA cumulative convertible preferred stock and 14.7
million USA warrants.
Expedia Approves USA Networks
Page 2
Expedia shareholders who did not exchange their shares for the USA
securities retained their Expedia common stock and received 0.192 warrants for
each Expedia share. Each warrant entitles the holder to purchase one share of
Expedia common stock for $52 through February 4, 2009. Including warrants
distributed to Expedia option holders on January 25, 2001, Expedia issued 6.4
million warrants to holders of its securities. The Expedia warrants will trade
on Nasdaq under the symbol "EXPEW."
The number of shares of USA common stock and USA cumulative convertible
preferred stock received in exchange for each exchanging Expedia share will
change in the event that all of the approximately 240,000 shares submitted via
notice of guaranteed delivery are not submitted to the exchange agent by
Wednesday at 5:00 p.m., eastern time. The final exchange ratios will be
announced on Thursday, February 7, 2002.
The USA cumulative convertible preferred stock has a $50 face value, a
1.99% annual dividend, two votes per share, and is convertible at any time into
USA common stock at a conversion price of $33.75 per USA share, subject to a
downward adjustment to the extent the average share price of USA common stock
over a ten trading-day period prior to conversion is greater than $35.10. Each
complete USA warrant entitles the holder to purchase one share of USA common
stock for $35.10 through February 4, 2009. The USA cumulative convertible
preferred will trade on OTC under the symbol "USAIP". The USA warrants will
trade on Nasdaq under the symbol "USAIW."
Immediately after the closing of the merger transaction, the Expedia
board of directors expanded the Board from 7 to 13 members. With one of these
members still to be named, the new Expedia Board consists of Barry Diller,
chairman and chief executive officer of USA, as chairman; Richard Barton,
president and chief executive officer of
Expedia Approves USA Networks
Page 3
Expedia; Tom Breitling, former president of Travelscape, Inc.; Julius
Genachowski, executive vice president and general counsel of USA; Jay Hoag,
general partner of Technology Crossover Ventures; Victor Kaufman, vice chairman
of USA; Dara Khosrowshahi, executive vice president and chief financial officer
of USA; Gregory Maffei, CEO of 360networks and former chairman of Expedia's
board of directors; Daniel Marriott, senior vice president, strategic planning,
USA; Jon Miller, president and CEO, USA Information and Services, a division of
USA; John Pleasants, president and CEO of Ticketmaster, Inc.; and Gregory
Stanger, senior vice president and chief financial officer of Expedia..
It is anticipated that the Board will fill the remaining Board seat
promptly
ABOUT EXPEDIA, INC.
Expedia, Inc. (Nasdaq: EXPE) operates the largest online travel
service in the world, with Expedia.com(R) in the United States and localized
versions in Europe and Canada. To help travelers traveL right, Expedia.com
provides a wide variety of travel products and services, such as Expedia(R)
Special RatE hotels and vacation rentals with the guaranteed lowest prices.
Expedia's quality and leadership are recognized by several awards, including
YAHOO! INTERNET LIFE'S "Best Overall Travel Site" and one of MOBILE COMPUTING &
COMMUNICATIONS' "Best Mobile Web Sites of 2001".
Expedia.com customers are supported by a credit card guarantee (U.S.
site only), the industry's best privacy policy, and live agents via e-mail and
an 800-number available 24 hours a day/seven days a week. Expedia.com is also
available under Travel on the MSN network of Internet services.
Expedia Approves USA Networks
Page 4
ABOUT USA NETWORKS, INC.
USA Networks, Inc. (Nasdaq: USAI), to be renamed USA Interactive upon
close of its pending transaction with Vivendi Universal, is organized into two
groups, the Interactive Group and the Entertainment Group. The Interactive Group
consists of Home Shopping Network (including HSN International and HSN
Interactive); Ticketmaster (Nasdaq: TMCS), which operates CitySearch and
Match.com; Hotel Reservations Network (Nasdaq: ROOM); Electronic Commerce
Solutions; Styleclick; Precision Response Corporation; and now, Expedia, Inc.
(Nasdaq: EXPE). The Entertainment Group consists of USA Cable, including USA
Network, SCI FI Channel, TRIO, Newsworld International, and Crime; Studios USA,
which produces and distributes television programming; and USA Films, which
produces and distributes films. On December 17, 2001, USA and Vivendi Universal
announced a transaction in which the assets of the Entertainment Group would be
contributed to Vivendi Universal Entertainment, a new joint venture.
###
Expedia, Expedia.com, and the airplane logo and Travelscape are either
registered trademarks or trademarks of Expedia, Inc. in the United States,
Canada and/or other countries. Other products and company names mentioned herein
may be trademarks of their respective owners.
FOR MORE INFORMATION, PRESS ONLY:
For Expedia: Darcy Bretz, Edelman Public Relations (312) 240-2619,
DARCY.BRETZ@EDELMAN.COM
- -----------------------
For USA: Ron Sato, USA Communications (212) 314-7254. Sato@usanetworks.com
FOR MORE INFORMATION, INVESTMENT COMMUNITY:
For Expedia: Marj Charlier, Director of Investor Relations, 425-564-7666
For USA: Roger Clark/Lauren Rosenfield, USA Investor Relations (212) 314-7400
[USA NETWORKS INC LOGO]
EXHIBIT 99.2
USA NETWORKS, INC. ANNOUNCES FINAL EXCHANGE RATIOS
IN EXPEDIA, INC. TRANSACTION
NEW YORK, NY (February 7, 2002) - USA Networks, Inc. (NASDAQ: USAI)
today announced the final exchange ratios in connection with its acquisition of
a controlling interest in Expedia, Inc. (NASDAQ: EXPE), which was completed on
February 4, 2002. The final exchange ratios, which became available after close
of market on February 6, 2002, confirm the number of shares of USA common stock,
shares of USA cumulative convertible preferred stock and USA warrants issued in
the transaction.
In the transaction, holders of 34.5 million Expedia shares elected to receive a
package of USA securities in exchange for their Expedia shares. This brings
USA's ownership of Expedia to 64.2% of the 53.7 million basic shares outstanding
and 94.9% of the voting interest. Each electing Expedia share was exchanged for
0.596582 shares of USA common stock, 0.380232 shares of USA cumulative
convertible preferred stock, 0.4229 USA warrants and cash in place of any
fractional shares and warrants. USA issued, in aggregate, 20.6 million shares of
USA common stock, 13.1 million shares of USA cumulative convertible preferred
stock and 14.6 million USA warrants. The USA cumulative convertible preferred
stock trades on OTC under the symbol "USAIP" and the USA warrants trade on
Nasdaq under the symbol "USAIW."
ABOUT USA NETWORKS, INC.
- ------------------------
USA Networks, Inc. (Nasdaq: USAI), to be renamed USA Interactive upon close of
its pending transaction with Vivendi Universal, is organized into two groups,
the Interactive Group and the Entertainment Group. The Interactive Group
consists of Expedia, Inc. (Nasdaq: EXPE), Home Shopping Network (including HSN
International and HSN Interactive); Ticketmaster (Nasdaq: TMCS), which operates
CitySearch and Match.com; Hotel Reservations Network (Nasdaq: ROOM); Electronic
Commerce Solutions; Styleclick; and Precision Response Corporation. The
Entertainment Group consists of USA Cable, including USA Network, SCI FI
Channel, TRIO, Newsworld International, and Crime; Studios USA, which produces
and distributes television programming; and USA Films, which produces and
distributes films. On December 17, 2001, USA and Vivendi Universal announced a
transaction in which the assets of the Entertainment Group would be contributed
to Vivendi Universal Entertainment, a new joint venture.
# # #
Contacts: USA Communications: USA Investor Relations:
Ron Sato Roger Clark/Lauren Rosenfield
212/314-7254 212/314-7400