Company: LBRDK
Filing Date: 2025-01-22
Form Type: DEFM14A
Source: 0001140361-25-001609
Chunk: 97

Company: Liberty Broadband Corp
Filing Date: 2025-01-22
Form: DEFM14A
Chunk 97
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band, which Charter has agreed to bear, and for holders of shares of Liberty Broadband common stock. Such liabilities could exceed $420 million.

The GCI divestiture and certain internal reorganization steps taken prior to the GCI divestiture are intended to be taxable transactions for U.S. federal (and applicable state and local) income tax purposes. The amount of gain recognized by Liberty Broadband and for holders of shares of Liberty Broadband common stock with respect to these transactions depends, in part, on the fair market value of GCI. As a result, the amount of income tax liabilities resulting from the GCI divestiture is not certain, and such liabilities may be substantial. The tax liabilities of Liberty Broadband effectively become liabilities of Charter after the completion of the combination, and Charter has agreed to bear any such liabilities. See “U.S. Federal Income Tax Considerations of the Combination” for further discussion of the U.S. federal income tax considerations of the distribution of stock of GCI spinco to holders of shares of Liberty Broadband common stock.

To the extent that the cash tax payable by Liberty Broadband as a result of the GCI divestiture exceeds $420 million, GCI spinco is required to pay Charter for 100% of the tax benefit arising from the additional tax gain corresponding to any cash tax payable in excess of $420 million when such tax benefits are actually realized, under a tax receivables agreement to be entered into by Liberty Broadband, GCI spinco and Charter. However, there is no guarantee that GCI spinco will realize any tax benefits arising from the gain recognized in the GCI divestiture or that Charter would receive any payment from GCI spinco under the tax receivables agreement.

The merger agreement contains provisions that limit Charter’s and Liberty Broadband’s ability to pursue alternatives to the combination, could discourage a potential acquiror from making a favorable alternative transaction proposal and, in specified circumstances, could require Charter or Liberty Broadband to pay a substantial termination fee to the other.

The merger agreement contains provisions that make it more difficult for Liberty Broadband and Charter to engage in any alternative transaction with a third party. The merger agreement contains certain provisions that restrict the ability of Charter and Liberty Broadband to, among other things, solicit, initiate, knowingly facilitate, knowingly induce, knowingly encourage, or enter into or continue or otherwise participate in any discussions relating to, or approve or recommend, any third-party alternative parent transaction proposal or third-party alternative company transaction proposal,