Filed by DIRECTV pursuant to Rule 425 under the Securities Act and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934.
Subject Company: DIRECTV
Commission File No.: 001-34554
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1.
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What was announced?
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On Sunday, May 18, DIRECTV and AT&T announced that they are combining to create a leading provider of content across mobile, video, and broadband platforms in a stock-and-cash transaction.
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2.
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What is the structure of the transaction and when will it close? What approvals are required?
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AT&T will acquire DIRECTV in a stock-and-cash transaction for $95 per share, comprised of $28.50 per share in cash and $66.50 per share in AT&T stock.
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Upon closing, DIRECTV shareholders will own between 14.5% and 15.8% of AT&T shares on a fully-diluted basis based on the number of shares outstanding today.
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The merger is subject to approval by DIRECTV shareholders and review by the U.S. Federal Communications Commission, U.S. Department of Justice, a few U.S. states and some Latin American countries.
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The transaction is expected to close within approximately 12 months.
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3.
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Why is DIRECTV combining with AT&T? How will this benefit our company?
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This combination significantly enhances the long-term competitiveness of both DIRECTV and AT&T.
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Together, DIRECTV and AT&T will be well-positioned to realize substantial incremental growth by offering consumers competitive and innovative broadband, video and mobile services.
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The combined company will cover 70 million customer locations and be a stronger competitive alternative to cable with a better customer experience.
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Furthermore, it will be well-positioned to meet the evolving video and broadband needs of the 21st century marketplace.
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4.
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How do the cultures of the two companies compare?
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As a long time strategic partner, we know AT&T well—and they recognize that our employees are our most important asset.
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We share very similar cultural priorities. We have a similar dedication to innovation and customer service, as well as investing in our people. We both place a high emphasis on teamwork, collaboration and trust. Corporate Social Responsibility and diversity & inclusion in the workplace are extremely important to both companies.
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Furthermore, AT&T has a proven track record of successful company integrations, and as a result, we expect a smooth and successful integration process.
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5.
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How will this impact me and my job? How will this affect my responsibilities on a day-to-day basis? What can I expect in the interim before the transaction closes?
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AT&T recognizes the key to DIRECTV’s success is our diversely talented team of employees.
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Together, we will have the opportunity to execute our strategy on a larger scale and strengthened platform, while taking advantage of the key capabilities and talent of each company.
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As with any transaction of this size, we expect there will be some overlap in job functions.
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While it is difficult to predict any outcomes at this time, we are committed to keeping employees informed and treating all employees with respect and dignity throughout this process.
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However, until the transaction closes, we remain separate companies. There should be no change to our operations or how we go about our business, so stay focused on your responsibilities, serving our customers and delivering the highest level of performance.
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We have an agreement with AT&T on continuing substantially comparable pay and benefits (in the aggregate) through December 31, 2016 (assuming the transaction closes in 2015).
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6.
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How will this impact our work locations?
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DIRECTV will continue to be headquartered in El Segundo, CA.
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Decisions regarding other work locations have yet to be made, but in the meantime, stay focused on your responsibilities, serving our customers and delivering the highest level of performance.
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We will provide you with more details as they are available.
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7.
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Will there be changes to benefits and compensation?
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Until the transaction closes, we continue to operate as independent companies, so no immediate changes to your compensation or benefits will take place as a result of this announcement.
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For example, current benefits you’ve elected in 2014 remain in place, and we will have our usual open enrollment for 2015 during the standard timeframe later this year.
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We have an agreement with AT&T on continuing substantially comparable pay and benefits (in the aggregate) through December 31, 2016 (assuming the transaction closes in 2015).
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If and when changes are made, they will be communicated to employees well in advance of those changes.
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8.
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What will happen to my shares in DIRECTV?
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When the transaction closes, DIRECTV stockholders will receive $95.00 per share under the terms of the merger, comprised of $28.50 per share in cash and $66.50 per share in AT&T stock.
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If AT&T stock price at closing is between $34.90 and $38.58, DIRECTV shareholders will receive a number of shares between 1.724 and 1.905, equal to $66.50 in value.
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Holders of DIRECTV equity awards will have their awards converted into equity awards in AT&T at the close of the transaction. You will receive further information in the coming weeks.
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9.
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How is DIRECTV going to be integrated within the combined company? What will Mike White’s role be?
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Details regarding the organization of the combined company will be provided by closing.
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Mike’s focus is on executing DIRECTV’s operating plan, leading the company through the necessary approvals process and working towards a successful integration.
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His priority is to act in the best interests of the company, the employees and the shareholders, ensuring that all stakeholders are informed throughout this process.
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10.
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Will the DIRECTV leadership team remain in place?
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Until this transaction closes, our management team remains focused on executing on DIRECTV’s operating plan and on successfully completing this transaction.
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Details regarding the structure of the combined company, including leadership, will be provided by closing.
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11.
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Is my reporting structure impacted by this announcement? Will my supervisor change?
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Until the transaction closes, we will continue to operate as separate companies, so there will be no immediate effect on our operations or how we at DIRECTV go about our business.
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It is business as usual, so stay focused on your responsibilities serving our customers and delivering the highest level of performance.
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12.
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How will this affect our customers and product offerings?
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We will continue to provide our customers with an exceptional customer experience and a premium video entertainment experience.
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Until the transaction closes, we will continue to operate as separate companies and this announcement should have no effect on our operations or how we at DIRECTV go about our business.
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13.
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What should I say if contacted by people outside the company?
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If you are contacted by the media or if you encounter any external inquiries, please immediately forward any questions you may receive to Jade Ekstedt at (310) 964-3429 or jlekstedt@directv.com.
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If you receive questions from non-media persons (friends, relatives, DIRECTV customers), feel free to refer them to directv.com to find more information. You may also provide them with these details:
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Until the transaction closes, we’re still operating as separate companies, and are still committed to providing exceptional customer experience and the best video entertainment experience in the world.
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This combination significantly enhances the long-term competitiveness of both DIRECTV and AT&T.
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o
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Together, DIRECTV and AT&T will be well-positioned to realize substantial incremental growth by offering consumers competitive and innovative broadband, video and mobile services.
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o
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The combined company will cover 70 million customer locations and be a stronger competitive alternative to cable with a better customer experience.
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Furthermore, it will be well-positioned to meet the evolving video and broadband needs of the 21st century marketplace.
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14.
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How can I learn more about AT&T?
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AT&T’s website, www.about.att.com is a great place to learn more about the company and its mission, management team, financial statements, latest news and more.
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