Gulfstream, the division of General Dynamics Corp. (NYSE: GD) that makes business jets is hiring, and ramping up to build more of its large-cabin, long-range planes. The company plans to spend $500 million tooling up is Savannah, Georgia, plant and adding 1,000 new jobs over the next seven years. The first jobs will be technologists and engineers, followed by manufacturing and service workers.

According to Bloomberg, a survey by another aviation-related company, Honeywell International Inc. (NYSE: HON), indicates that the recovery in the market for business jets is set to occur in late 2011 and get better in 2012.

That’s good news for those captains of industry who have waited on the sidelines to get their own rides. And it’s not as if these folks have exactly been suffering. The Wall Street Journal has posted a list of the CEO pay at 456 US companies with revenue of at least $4 billion as of the company’s most recent fiscal year proxy statement.

The top five are Liberty Media Corp. (NASDAQ: LMDIA) CEO Gregory Maffei with total compensation of about $87 million, Oracle Corp. (NASDAQ: ORCL) CEO Larry Ellison with nearly $69 million, Occidental Petroleum Corp.’s (NYSE: OXY) Ray Irani with about $52 million, CBS Inc. (NYSE: CBS) chief Les Moonves with almost $40 million, and Viacom Inc. (NYSE: VIA) boss Philippe Dauman with almost $44 million.

Now chances are that these guys already have their own corporate jets, but think of the executives that are struggling along on a mere $1 or $1 million. If a company has a spare $58 million sitting in its cash hoard, these underpaid folks can at least fly in style on a Gulfstream G650. For the budget conscious, a Gulfstream G250 is a mere $24 million.

Use of a company plane either for business or personal travel is a perquisite for company executives. In 2009 CBS’s Moonves, for example, received $54,577 in transportation benefits including use of the company plane and ground transportation. The only good news for those of us who fight the crowds at US airports is that the perk is taxable.

Paul Ausick

The company will also have Game Show Network, FUN Technologies and the three regional sports networks. Liberty Entertainment Inc. will now be comprised of:

• approximately 54% of the common stock of DIRECT;
• Liberty Sports Holdings, which owns three regional sports networks;
• a 65% interest in Game Show Network (GSN) and FUN Technologies;
• approximately $30 million in cash in addition to cash generated by operations after March 31;
• $2 billion in debt.

DIRECTV will provide to LEI up to $650 million in funding pursuant to a term loan facility in order to service the LEI debt.

In the split-off, each holder of Series A Liberty Entertainment group tracking stock will receive 0.9 of a share of LEI Series A common stock and will retain 0.1 of a share of Liberty Starz stock; each holder of Series B Liberty Entertainment group tracking stock will receive 0.9 of a share of LEI Series B common stock and will retain 0.1 of a share of Liberty Starz stock for each share of Series B Liberty Entertainment group tracking stock held at the time of the split-off.

LEI and DIRECTV Group (DTVG) will merge with subsidiaries of a newly formed subsidiary of DTVG that will be called DIRECTV. DIRECTV will become the parent company of DTVG and LEI. DIRECTV will have two classes of stock, Class A which will be entitled to one vote per share and Class B which will be entitled to 15 votes per share. In the DTVG merger, DTVG shareholders will receive one share of DIRECTV Class A common stock for each share of DTVG common stock held. The holders of LEI Series A and Series B common stock (other than John Malone, his wife and associated trusts) will receive 1.1111 shares of DIRECTV Class A common stock for each share of LEI Series A or Series B common stock held. John Malone, his wife and associated trusts will receive 1.1111 shares of DIRECTV Class B common stock for each share of LEI Series B common stock held.

This has been a very confusing story for years.  The new structure does not seem that much less complicated on the surface.  We have heard of many shareholders who have refrained from investing in the Liberty companies because they have had too hard of a time determining what they really own in each class of stock.  And after reading the above scenarios it may be good to ask yourself if the structure sounds easy to explain now……..

JON C. OGG

Under terms of the deal,  Malone’s Liberty will invest in Sirius XM.  The satellite radio provider and its lenders have also agreed to extend its outstanding loans which are due in May.

These transactions “should” resolve resolve the uncertainty over the company’s and its subsidiaries’ debt that is maturing in 2009.  The company says this DOES resolve it, but we argue it SHOULD resolve it.

Sirius XM also announced that the term loan and revolving loan for  XM Satellite Radio, a subsidiary of Sirius XM,  been rolled into a single term-loan facility of $350 million.

Liberty will loan $150 million to XM Satellite Radio to repay a portion of the  10% convertible notes due December 1 issued by its former corporate parent.  Sirius XM has granted Liberty 12.5 million shares of new preferred stock convertible into 40% of the common stock of Sirius XM.

Saying a $0.13 or $0.14 stock was “allowed to live” is a misnomer.  This company is living on life support and may be in a coma.  There are still many issues ahead for Sirius XM, and the shaky economy and plummeting auto sales  is just a small piece of the pie.

Sirius XM shares are up more than 6% today to $0.1384.

Jon C. Ogg
March 6, 2009

This was part of Liberty’s repurchase plan, but it was a privately negotiated transaction as this trade nor enough shares crossed on the exchange on that day.  According to trade recaps, this stock only traded 1.04 million shares of common stock on October 7 and the stock closed at $11.22 with an intra-day trading range of $11.16 to $12.49.

Jon C. Ogg
October 9, 2008

We covered this scenario in our SPECIAL SITUATION newsletter that went out on April 2, 2008 at $21.22; and the intro to subscribers was as follows:

• ….Our current pick is IAC/Interactive (NASDAQ: IACI), and we gave three likely scenarios we believe to occur. Our downside target limits the implied risk to 12% if you hedge your transaction as we would do. The upside would be an implied 33% to more than 50% if the scenarios pan out the way we expect. Barry Diller isn’t entirely out of the soup yet and Malone may have some more tricks up his sleeve. After the ruling came out we ran the hard detailed numbers and eyeballed various probabilities for this call….

Liberty has agreed to drop its appeal and will not oppose the proposed single-tier spin-offs of HSN, Interval International, Ticketmaster and Lending Tree.  IAC advanced those filings earlier today by making its initial filings with the SEC.  This is all within our line of expectations and should clear the way to the unlocking of value.

Liberty & IAC also agreed on a number of arrangements regarding the governance of the spun off companies as follows:

• Liberty’s right to board representation on each company,
• a standstill agreement that limits Liberty’s ability to increase its ownership stakes,
• and to take a variety of other actions with respect to the spun off companies.

You can join our open email distribution list to hear about other break-ups, IPO’s, secondary offerings, special financings, mergers, spin-offs, and other special situations.

John Malone may be happy with what he got here and he may not, but as far as we are concerned this looks like a clear win for Barry Diller.  IAC shares closed up 2.7% at $23.00 in normal trading today, and shares are up over 3% at $23.85 in after-hours trading.

Jon C. Ogg
May 12, 2008

Jon Ogg produces the twice-monthly SPECIAL SITUATION INVESTING subscriber newsletter and he can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.