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MSG Entertainment To Acquire MSG Networks In All-stock Deal - Quick Facts

Madison Square Garden Entertainment Corp. (MSGE) and MSG Networks Inc. (MSGN) announced Friday that they have reached a definitive agreement for MSG Entertainment to acquire MSG Networks in an all-stock, fixed exchange ratio transaction.

The merger is expected to be tax-free for both MSG Entertainment and MSG Networks and their stockholders. Upon the closing of the transaction, MSG Networks stockholders would receive 0.172 shares of MSG Entertainment Class A or Class B common stock for each share of MSG Networks Class A or Class B common stock they own.

The exchange ratio is approximately 4% above the ratio of the unaffected closing stock prices of the two companies on March 10, 2021, the last trading day before a press report speculated on a potential transaction.

This transaction would create a leading entertainment and media company with a more diversified revenue base that would be well positioned to deliver innovative experiences across all of its assets.

The combined company would have a stronger liquidity position to support its live entertainment business, which following the shutdown of its venues due to the pandemic, is now on a path back to normal operations.

The combination of the companies' media, digital and venue assets creates a powerful platform for potential sports gaming partners, which is expected to generate significant incremental revenue in the years ahead. It is anticipated that the combined company would realize meaningful tax efficiencies.

The agreement was unanimously approved by the Boards of Directors of both MSG Entertainment and MSG Networks. The transaction, which is also subject to customary closing conditions, is expected to be completed during the third quarter of calendar 2021.

The transaction is subject to approval by a majority of the combined voting power of the outstanding shares of MSG Networks.

Upon the closing of the transaction, a current director of MSG Networks elected by the holders of its Class A common stock would be appointed as a director of MSG Entertainment.

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