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Liberty Media Corporation to Acquire a Majority Interest in FUN Technologies plc.

L0NDON, November 22 /PRNewswire/ --

- Not for release, publication or distribution, in whole or part, in, into or from Australia or Japan

FUN Technologies plc (AIM: FUN, TSX: FUN) ("FUN"), a market-leading developer and provider of online games, today announced that it has entered into an agreement (the "Share Purchase and Support Agreement") with Liberty Media Corporation (NYSE: L, LMC.B) ("Liberty") whereby Liberty will indirectly acquire a majority interest in FUN.

Liberty is a holding company owning interests in a broad range of electronic retailing, media, communications and entertainment businesses. Its businesses include some of the world's most recognized and respected brands and companies, including QVC, Encore, Starz, IAC/InterActiveCorp, Expedia and News Corporation.

FUN provides private-label gaming systems and services to many of the world's largest interactive entertainment groups, including AOL, MSN and Virgin. FUN's skill-gaming subsidiary, SkillJam Technologies, offers games and tournaments to over nine million registered users, across a wide range of distribution channels.

John Malone, Chairman and Chief Executive Officer of Liberty, stated:

"We are pleased to be making this investment in FUN. Lorne Abony and the FUN management team have an impressive record of achievement and we look forward to welcoming their entrepreneurial talent and leadership into the Liberty family."

Dr. Malone added, "we believe we can help FUN strengthen its industry leadership through collaboration with many of our programming and distribution affiliates. We have already been working successfully with FUN through GSN ("The Network for Games"), a Liberty affiliate - a relationship which underscores the effectiveness of combining compelling interactive media with television. We look forward to building FUN's businesses by combining FUN's leadership in online skill games with Liberty's media assets and expertise in using video to build popular brands and services."

Lorne Abony, Co-founder and Chief Executive Officer of FUN, commented:

"This is a landmark achievement, both for FUN stakeholders, and for the future prospects of FUN's businesses. We believe that this transaction will significantly enhance shareholder value in both the short and long term. Liberty is the right strategic partner to enable FUN's businesses to realize their full potential, through access to Liberty's world-class media and entertainment properties and affiliates. The transaction will also significantly strengthen FUN's balance sheet through Liberty's US$50 million investment. We are very excited about what this deal means for the future of FUN Technologies."

The Transaction

The transaction will be structured as a Scheme of Arrangement under section 425 of the UK Companies Act 1985 (the "Scheme"). Pursuant to the Scheme a wholly-owned, newly incorporated Canadian subsidiary of Liberty ("New FUN") will acquire all of the issued and outstanding ordinary shares in FUN ("Ordinary Shares"), on a fully diluted basis, in exchange for aggregate consideration consisting of approximately GBP83.7 million in cash and approximately 32.4 million common shares of New FUN (including common shares that would be issuable upon exercise of outstanding options, warrants and other rights to acquire common shares) (together, the "Maximum Consideration Payable"). The cash consideration to be paid by New FUN under the Scheme will be funded by Liberty by way of a subscription for approximately 33.8 million common shares of New FUN for the aggregate consideration of US$50 million plus approximately GBP83.7 million, payable in cash (which amount was determined as if Liberty had purchased 10.5 million common shares at 267 pence per share plus 23.2 million common shares at 360 pence per share).

If the Scheme becomes effective FUN will become a wholly-owned subsidiary of New FUN, and Liberty will own 51% of New FUN's common shares, on a fully diluted basis, and will appoint a majority of the members of New FUN's 11-member board of directors. The current FUN shareholders and holders of options, warrants and other rights to acquire Ordinary Shares, collectively, would own or have the right to acquire the remaining 49% of New FUN's common shares, on a fully diluted basis. Liberty will also be entitled to preemptive rights with respect to certain issues of common shares of New FUN following the consummation of the Scheme.

Based on the 49,679,872 Ordinary Shares outstanding and the 5,998,302 Ordinary Shares issuable upon conversion, exercise or exchange of outstanding options, warrants and other rights to acquire Ordinary Shares, in each case, as of November 21, 2005, if the Scheme were effected based upon such numbers, FUN shareholders would receive, for each Ordinary Share held, (i) GBP1.6369 in cash (or the Canadian dollar equivalent, as required) and (ii) 0.5453 of a common share of New FUN (the "Estimated Default Election"). The Estimated Default Election has been included for presentation purposes only. The actual default election applicable in the Scheme (the "Default Election") will be determined prior to the distribution of, and will be set forth in, the circular distributed to FUN shareholders in connection with the Scheme (the "Scheme Circular") and will depend upon the number of Ordinary Shares then outstanding and the number of Ordinary Shares issuable upon conversion, exercise or exchange of then outstanding options, warrants and other rights to acquire Ordinary Shares. Whether or not a FUN shareholder's Ordinary Shares are voted at the FUN shareholders meeting convened for the purpose of approving the Scheme, if the Scheme becomes effective, all outstanding Ordinary Shares will be transferred pursuant to the terms of the Scheme. FUN and Liberty urge FUN shareholders to read the Scheme Circular when it becomes available because it will contain important information relating to the Scheme.

Pursuant to the Scheme, FUN shareholders will be entitled to elect to receive greater proportions of cash or common shares of New FUN in exchange for their Ordinary Shares pursuant to a "mix and match" facility (the "Mix and Match Facility"), subject to the elections made by other shareholders and provided that in no event will New FUN distribute more than the Maximum Consideration Payable. All shareholders who do not make an election will be treated as if they made the Default Election. Details of the Mix and Match Facility are set out in the Appendix.

The availability of the New FUN common shares and the Mix and Match Facility under the terms of the Scheme to persons who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are located. Persons who are not resident in the United Kingdom should inform themselves of and observe any applicable requirements.

It is a condition to closing the Scheme that the London Stock Exchange has admitted the New FUN common shares to trading on the Alternative Investment Market of the London Stock Exchange ("AIM"). An AIM admission document will be published in connection with the application for admission to AIM in due course. In addition, the conditional listing of the New FUN common shares for trading on the Toronto Stock Exchange will be a condition to closing in favour of Liberty. It is intended that the Ordinary Shares be cancelled from trading on AIM and delisted from the Toronto Stock Exchange when the Scheme becomes effective.

As a condition to mailing the Scheme Circular, FUN will amend the terms of its Employee Share Option Scheme to provide that:

- upon completion of the Scheme, each outstanding option under the Employee Share Option Scheme will be converted into an option to acquire an equivalent number of common shares of New FUN on equivalent terms and conditions ("Rollover Options");

- all unvested options will automatically vest on the business day immediately following completion of the Scheme, rather than on the closing date of the Scheme as is currently contemplated by the Employee Share Option Scheme;

- all Rollover Options will expire on the third anniversary of the closing date of the Scheme (subject to the approval of the Scheme by disinterested shareholders owning a requisite number of Ordinary Shares), rather than six months from the closing date of the Scheme as is currently contemplated by the Employee Share Option Scheme; and

- no outstanding options may be exercised during the period starting five business days prior to the mailing of the Scheme Circular and ending on completion of the Scheme.

Completion of the Scheme will be subject to, among other things, sanction of the Scheme by the High Court of Justice in England and Wales ("High Court"), approval of the Scheme by a majority in number representing three-fourths or more in value of the class of FUN shareholders present and voting at the meeting of FUN shareholders that will be held to consider the Scheme, receipt of all necessary regulatory approvals and all necessary steps having been taken to effect the admission of the common shares of New FUN to trading on AIM. A summary of the conditions to the Scheme is set out in the Appendix.

The Board of Directors of FUN has determined that the terms of the Scheme are fair and reasonable to the holders of Ordinary Shares and in the best interests of FUN and that it will unanimously recommend that the holders of Ordinary Shares vote to effect the Scheme, as the directors intend to do in respect of their personal shareholdings. The Board of Directors' determination was based on the recommendations of a special committee of directors (the "Special Committee") who are independent of management that was formed for the purposes of considering the transaction as well as the opinion of CIBC World Markets Inc., independent financial advisor to the Special Committee, that the consideration payable under the Scheme is fair, from a financial point of view, to the holders of Ordinary Shares.

FUN has an initial hearing with the High Court scheduled for 22 December 2005 at which FUN will seek approval from the High Court to hold a shareholders' meeting to consider the Scheme and to distribute the Scheme Circular. Assuming the conditions to the Scheme are satisfied, FUN currently expects the Scheme to become effective in February or March 2006.

FUN has received confirmation from the UK Panel on Takeovers and Mergers that the UK City Code on Takeovers and Mergers (the "Code"), including the "Substantial Acquisition Rules" thereunder, do not apply to it, and FUN does not need to comply with the Code in relation to the Scheme.

The Share Purchase and Support Agreement provides, inter alia, for the implementation of the Scheme and contains certain assurances, representations, warranties and indemnities between the parties, including to implement the Scheme as soon as practicable, regarding the satisfaction of certain conditions to the Scheme and regarding the conduct of the business of FUN pending completion of the Scheme. In addition, prior to the closing of the Scheme or the Backup Transaction (as described below), FUN has agreed to be bound by certain non-solicitation covenants in favour of Liberty.

Shareholder Arrangements

Lorne Abony (the Chief Executive Officer and a director of FUN) and Andrew Rivkin (the Chairman and a director of FUN) have entered into a shareholders' agreement with Liberty pursuant to which they have agreed, among other things, to:

- vote in favour of the Scheme all of the 3.64 million Ordinary Shares that they will directly or indirectly own or control (Mr. Abony - 3.44 million; Mr. Rivkin - 200,000) prior to the completion of the Scheme, and not to vote such Ordinary Shares in favour of or accept any competing offer or scheme of arrangement;

- to elect to receive, pursuant to the Mix and Match Facility, all common shares for the Ordinary Shares they indirectly own or control (subject to proration); and

- to retain ownership or control (directly or indirectly) over specified numbers of common shares and options to acquire common shares of New FUN, as set forth in the Appendix, for a period three years following completion of the Scheme.

The Ordinary Shares that are directly or indirectly owned or controlled by Messrs. Abony and Rivkin represent approximately 7.3% of the outstanding Ordinary Shares, as of November 21, 2005.

In addition, Messrs. Abony and Rivkin have granted Liberty a right of first refusal with respect to the common shares of New FUN and options to acquire common shares of New FUN (including the common shares issuable upon exercise thereof) they will directly or indirectly own or control following the consummation of the Scheme for a period of three years. They have also entered into certain agreements not to compete with, if the Scheme is consummated, New FUN and its businesses, or, if the Scheme is not consummated and the Backup Transaction described below is consummated, FUN and its businesses. If the Scheme is not consummated and the Backup Transaction is consummated, Messrs. Abony and Rivkin have also agreed to vote in favour of Liberty's designees to the board of FUN and to tender the Ordinary Shares that they directly or indirectly own or control (and to exercise and tender any vested options they directly or indirectly own or control conditional upon the Ordinary Shares issuable thereunder being taken up in the tender offer) in any subsequent tender offer by Liberty for Ordinary Shares that meets certain specified criteria as to timing and minimum pricing. Also, if the Scheme is not consummated and the Backup Transaction is consummated, Messrs. Abony and Rivkin have granted Liberty a right of first refusal with respect to the Ordinary Shares and options to acquire Ordinary Shares (including the Ordinary Shares issuable upon exercise thereof) they directly or indirectly own or control following the consummation of the Backup Transaction for a period of three years.

As a result of these arrangements, the Ordinary Shares that are directly or indirectly owned or controlled by Messrs. Abony and Rivkin will constitute a separate class of shares for the purposes of the approval of the Scheme by FUN's shareholders. Messrs. Abony and Rivkin will separately approve the Scheme and consent to be bound by it, and the Ordinary Shares that are directly or indirectly owned or controlled by them will not be eligible to vote at the shareholders meeting convened for the purpose of approving the Scheme.

Liberty has entered into a separate agreement with Richard Weil, the President of FUN, pursuant to which he has agreed to retain ownership or control (directly or indirectly) over specified numbers of options to acquire Ordinary Shares (including the corresponding Rollover Options and any common shares of New FUN acquired upon exercise of such options) for two years following the Scheme closing.

In addition to these arrangements, Stampee Technologies Inc., which owns 4.6 million Ordinary Shares, has signed an irrevocable undertaking to vote these shares in favour of the Scheme and not to vote these shares in favour of or accept any competing offer or scheme of arrangement. These shares represent approximately 9.3% of the outstanding Ordinary Shares, as of November 21, 2005.

The "Backup Transaction"

If the Scheme is not completed, Liberty will have the right (but not the obligation) to purchase 10,527,654 Ordinary Shares for aggregate consideration of US$50 million, payable as to US$40 million in cash and as to US$10 million in Liberty stock. If Liberty proceeds with the Backup Transaction, two Liberty designees would join the board of FUN, replacing two of the existing board members, and Liberty would become entitled to preemptive rights with respect to certain issues of Ordinary Shares following the consummation of the Backup Transaction. Completion of this transaction would be subject to customary conditions including the receipt of all necessary regulatory approvals.

Definitive Agreement

A copy of the Share Purchase and Support Agreement will be filed with Canadian securities regulators and will be accessible online at www.sedar.com.

About FUN Technologies plc

FUN Technologies plc is one of the world's leading online casual gaming providers. FUN's strategy is to provide its cutting-edge, person-to-person gaming systems to top, licensed distribution partners in regulated markets around the world. FUN is a public company, incorporated in England and Wales, and is listed on both the Toronto Stock Exchange and the Alternative Investment Market (AIM) of the London Stock Exchange under the symbol "FUN".

About Liberty Media Corporation

Liberty Media Corporation (NYSE: L, LMC.B) is a holding company owning interests in a broad range of electronic retailing, media, communications and entertainment businesses. Its businesses include some of the world's most recognized and respected brands and companies, including QVC, Encore, Starz, IAC/InterActiveCorp, Expedia and News Corporation. APPENDIX

Conditions to the transaction

The following is a summary of the conditions to completion of the Scheme found in the Share Purchase and Support Agreement and does not purport to be complete. Shareholders are encouraged to review the full text of the Share Purchase and Support Agreement which will be accessible online at www.sedar.com.

The Scheme will be governed by English law and subject to the jurisdiction of the English Courts, to the conditions set out below and the further terms to be set out in the Scheme Circular.

Mutual Conditions

- no laws or injunctions preventing consummation of the Scheme

- High Court and shareholder approval of the Scheme (as more specifically described above)

- all necessary steps having been taken to admit the New FUN common shares for trading on AIM, subject only to the Scheme having become effective, the New FUN common shares having been issued and the official notice of issuance of the New FUN common shares

- receipt of all necessary governmental approvals (including expiry of waiting period under the Hart-Scott-Rodino Act)

Conditions in favour of FUN (waivable in the sole discretion of FUN)

- performance of covenants by Liberty, New FUN and another wholly-owned subsidiary of Liberty

- accuracy of representations and warranties of Liberty

Conditions in favour of Liberty (waivable in the sole discretion of Liberty)

- performance of covenants by FUN

- accuracy of representations and warranties of FUN

- engagement of a Canadian registrar for the Ordinary Shares and New FUN common shares

- receipt of specified consents under FUN's contracts

- all "Material Contracts" of FUN being in full force and effect

- absence of actual or threatened litigation that would have a "Material Adverse Effect" on FUN

- absence of any law, injunction or governmental order that would impose any obligation having a "Material Adverse Effect" on Liberty or Liberty's ability to close the Scheme

- absence of any "Material Adverse Effect" on FUN since the date of the Share Purchase and Support Agreement

- no action by FUN, its board of directors or any other person to prevent the reconstitution of the board of directors of FUN and New FUN as contemplated by the Share Purchase and Support Agreement

- listing of New FUN common shares on the Toronto Stock Exchange

- the shareholders' agreement with Messrs. Abony and Rivkin, the separate lock-up arrangement with Richard Weil and the irrevocable undertaking from Stampee Technologies Inc. described above being in full force in effect with all material obligations thereunder having been performed

- absence of any injunctions, laws or actual or pending actions or proceedings seeking to:

 - challenge, make illegal or restrain or prohibit the Scheme;

 - prohibit or materially limit Liberty's right to indirectly own or
 operate New FUN or to exercise full ownership rights over the
 common shares acquired in the Scheme; or

 - increase in any material respect the liabilities and obligations
 of Liberty under the Scheme



- absence of any general suspension in trading of securities, declaration of banking moratorium or commencement or material worsening of any war or national/international calamity, in each case, in or involving the U.S., Canada or the U.K.

- absence of any withdrawal or adverse change in the recommendation of FUN's board of directors in favour of the Scheme

- FUN not entering into an agreement with respect to an alternative transaction

Mix and Match Facility

Satisfaction of elections other than Default Elections will be subject to equal and opposite elections being made by other shareholders. Irrespective of the number of shareholders who elect for cash consideration or common shares of New FUN, in no event will cash or common shares in excess of the Maximum Consideration Payable be delivered in the Scheme (except where required to provide cash in lieu of fractional shares).

New FUN's ability to satisfy all elections for additional cash consideration or additional common shares will depend on other shareholders making equal and opposite elections. To the extent that elections for cash consideration and/or common shares of New FUN cannot be satisfied in full, they will be reduced on a pro rata basis. As a result, shareholders who elect to receive additional cash consideration or additional common shares of New FUN will not know the exact amount of cash consideration or number of common shares they are entitled to receive until settlement of the consideration under the Scheme. When the Scheme becomes effective, an announcement will be made concerning the extent to which elections other than the Default Election have been satisfied. The mix and match proration procedures described above will not affect the rights of non-electing shareholders, who will receive the Default Election.

Lockup obligations of Messrs. Abony and Rivkin

Prior to the closing of the Scheme, none of the Ordinary Shares (or options to acquire Ordinary Shares) that are directly or indirectly owned or controlled by Messrs. Abony and Rivkin may be transferred to any person. Following the closing of the Scheme, Messrs. Abony and Rivkin are required to maintain ownership or control over the following number of common shares of New FUN (including options to acquire common shares of New FUN and the common shares issuable upon exercise thereof):

- through the first anniversary of the Scheme closing, each of Messrs. Abony and Rivkin must retain an amount equal to the number of common shares underlying his respective Rollover Options (Mr. Abony - 950,000; Mr. Rivkin - 1.2 million) plus 80% in the case of Mr. Abony, and 100%, in the case of Mr. Rivkin, of the common shares received by or on behalf of him in the Scheme;

- from the first anniversary through the second anniversary of the Scheme closing, each of Messrs. Abony and Rivkin must retain an amount equal to 50% of the number of common shares he was required to retain during the period beginning at the Scheme closing and ending on the first anniversary of the Scheme closing; and

- from the second anniversary through the third anniversary of the Scheme, each of Messrs. Abony and Rivkin must retain an amount equal to 50% of the number of common shares he was required to retain during the period beginning at the first anniversary of the Scheme closing and ending on the second anniversary of the Scheme closing.

If the Scheme fails and the Backup Transaction has occurred, none of the Ordinary Shares (or options to acquire Ordinary Shares) that are directly or indirectly owned or controlled by Messrs. Abony and Rivkin may be transferred to any person during the six months following the closing of the Backup Transaction.

This announcement does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any security, nor shall there be any sale, issuance or transfer of the securities referred to in this announcement in any jurisdiction in contravention of applicable law. The New FUN common shares to be issued to FUN shareholders under the Scheme have not been, and will not be, registered under the United States Securities Act of 1933 (the "Securities Act") or under the securities laws of any state, district or other jurisdiction of the United States, or Australia or Japan and no regulatory clearances in respect of the registration of New FUN common shares have been, or will be, applied for in any jurisdiction. It is expected that the New FUN common shares will be issued in reliance upon the exemption from the registration requirements of the Securities Act provided by Section 3(a)(10) thereof. Under applicable US securities laws, FUN shareholders who are or will be deemed to be "affiliates" of FUN or New FUN prior to, or of New FUN after, the Scheme becomes effective will be subject to certain transfer restrictions relating to the New FUN common shares received in connection with the Scheme.

FUN Technologies Contacts: Investor Relations, Lorne Abony, CEO, Tel: +1-416-840-0806, James Lanthier, CFO, Tel: +1-416-840-0448, Panmure Gordon & Co, Dominic Morley, Tel: +44-(0)20-7459-3600, Media Relations: Tracey Irwin, Director of Communications, Tel: +1-416-840-0450, tirwin@funtechnologies.com, Steve Acken (Canada), Tel: +1-416-969-2710, sacken@environicspr.com, Tom McFeeley (US), Tel: +1-203-325-8772 ext. 12, tmcfeeley@environics-usa.com, Alex Mackey (UK), Tel: +44-(0)20-7736-2938, alex.mackey@catullusconsulting.com, Liberty Media Corporation Contact: John Orr, Vice President of Investor Relations, Tel: +1-720-875-5622
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Date:Nov 22, 2005
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