Liberty Digital Gets Alloyed

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New York -- Liberty Digital has bought a 16 percent stake
in online direct marketer Alloy Online Inc. in a deal valued at about $54 million.

The arrangement is expected to give Liberty an inroad into
the lucrative teen market -- Alloy's specialty -- as it gets ready to launch
interactive digital-cable networks in the future.

Liberty Digital will receive some 2.9 million shares of
newly issued Alloy common stock for $19 per share. Under the terms of the deal, Alloy will
receive $10 million in cash and 837,740 shares of Liberty Digital common stock as
consideration.

Pro forma for the transaction, Liberty Digital will own
16.6 percent of the outstanding shares of Alloy. Alloy has about 14.7 million shares
outstanding.

Lee Masters, president and CEO of Liberty Digital, will
join Alloy's board of directors. In a prepared statement, Masters said Alloy's
dynamic business model, strong brand and innovative management team "all point to an
opportunity for significant value creation and represent important motivating factors in
our investment."

Alloy chairman and CEO Matt Diamond said in a press release
that Alloy plans to expand its electronic-commerce presence in the youth market.

"Alloy's strong market position, combined with
Liberty Digital's financial and strategic support, makes this a very powerful
alliance," he added.

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