MSGE - MSG Entertainment stock rises aftermarket on potential spin-off

• Madison Square Garden Entertainment ( NYSE: MSGE ) stock rose 5.3% postmarket on Thursday after the firm said it will explore a potential spin-off to create a separate public company comprised of its traditional live entertainment business and its MSG Networks business.
• The proposed spin-off would separate these units from MSGE's MSG Sphere and Tao Group Hospitality businesses.
• The deal will enable both companies to pursue distinct business and capital allocation strategies.
• The deal would be structured as a tax-free spin-off to all MSGE shareholders.
• First, record holders of MSGE class A and class B stock would receive a pro-rata distribution equivalent to approx. two-thirds stake in the live entertainment and media company.
• The remaining approx. one-third economic interest in the live entertainment and media company would be retained by MSGE.
• The retained shares would be available for use in a tax-free exchange offer for MSGE stock, to raise capital for general corporate purposes, and/or for use in a follow-on pro-rata spin-off to MSGE shareholders.
• "The live entertainment and media company would include Madison Square Garden, the Christmas Spectacular production and MSG Networks and would generate substantial free cash flow. The second company, comprised of MSG Sphere and Tao Group Hospitality, would be focused on unique shared experiences, innovation and global opportunities for growth," said MSGE CEO James Dolan.
• • After the proposed spin-off, MSGE is expected to include MSG Sphere, majority stake in TAO Group Hospitality, approx. one-third stake in the live entertainment and media firm and the majority of MSGE's cash on hand.
• • • There can be no assurance that the proposed spin-off will be completed as described above, or at all.
  • • There is no timetable for completing this process.

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