<PAGE>
As filed with the Securities and Exchange Commission on December 21, 2000
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
SCHEDULE TO
(Rule 14d-100)
TENDER OFFER STATEMENT UNDER SECTION 14 (d) (1) OR SECTION 13 (e) (1)
OF THE SECURITIES EXCHANGE ACT OF 1934
_________________
TELOCITY DELAWARE, INC.
(Name Of Subject Company (Issuer))
DIRECTV BROADBAND, INC.
a wholly owned subsidiary of
HUGHES ELECTRONICS CORPORATION
(Names Of Filing Persons (Offerors))
_________________
COMMON STOCK, PAR VALUE $.001 PER SHARE
(Title Of Class Of Securities)
______________________
(Cusip Number Of Class Of Securities)
_________________
LARRY D. HUNTER
VICE PRESIDENT
HUGHES ELECTRONICS CORPORATION
200 N. SEPULVEDA BOULEVARD
EL SEGUNDO, CALIFORNIA 90245
(310) 662-9688
(Name, Address And Telephone Number Of Person Authorized To
Receive Notice And Communications On Behalf Of Filing Persons)
_________________
COPIES TO:
GARY OLSON, ESQ.
LATHAM & WATKINS
633 WEST FIFTH STREET, SUITE 4000
LOS ANGELES, CALIFORNIA 90071
(213) 485-1234
CALCULATION OF FILING FEE
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Transaction Valuation Amount of Filing Fee
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Not Applicable Not Applicable
Check the box if the filing relates solely to preliminary communications made before the commencement of a tender
offer.
<S> <C>
Amount Previously Paid: Filing Party:
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Form or Registration No.: Date Filed:
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[X] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[X] third-party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction to Rule 13a-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer:
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<PAGE>
FOR IMMEDIATE RELEASE
Hughes Contact: Richard Dore (310) 662-9670
Telocity Contact: Bill Chandler (408) 863-5983
HUGHES TO ACQUIRE TELOCITY IN $180 MILLION CASH DEAL;
EXPANDS NATIONWIDE BROADBAND SERVICES CAPABILITY
Combined with DIRECTV, High-Speed Internet Service Creates Whole House
Entertainment and Information Solution
EL SEGUNDO, Calif., and CUPERTINO, Calif., Dec. 21, 2000-- HUGHES
Electronics Corporation (NYSE:GMH), the world's leading provider of digital
television entertainment, satellite services and satellite-based private
business networks, and Telocity, Inc., (NASDAQ:TLCT), a leading national
provider of broadband services via digital subscriber lines (DSL), announced
today that Hughes will acquire Telocity for $2.15 per share in cash, or a total
purchase price of approximately $180 million. The boards of directors of both
companies have approved the agreement.
With the addition of Telocity's existing DSL-based network, HUGHES will
significantly expand its ability to offer Internet and broadband services to
consumers throughout the United States. The Telocity network will complement the
HUGHES nationwide DirecPC broadband service via satellite, which is announcing
the availability of its new "two-way" satellite service this week. With the
acquisition of Telocity, HUGHES will be the country's first provider to offer on
a national basis a portfolio of consumer entertainment and information services
that includes digital multichannel television, and wired and satellite broadband
Internet access.
"This acquisition is strategically important for HUGHES and for DIRECTV,"
said HUGHES Chairman and CEO Michael T. Smith. "We currently offer DirecPC as
our primary nationwide Internet and broadband offering, but the projected demand
for broadband exceeds our existing capacity to deliver it by satellite. With the
addition of Telocity, we achieve nearly unlimited capacity, and can offer our
customers a choice of DSL where it is available, and two-way satellite broadband
in circumstances where customers prefer satellite delivery or where DSL is not
and will not be available."
"With proprietary technology and a nationwide footprint, Telocity has
become an innovator and leader in providing life-enhancing broadband services to
our subscribers," said Patti Hart, president and CEO of Telocity, Inc. "We are
proud to join the HUGHES family, and this is an extraordinary opportunity for
us. Together, we will provide a comprehensive suite of services that will
challenge the competition and enhance our customers' lives. Together, we will be
strongly positioned to be leaders in the exploding broadband market."
<PAGE>
Following the necessary government approvals and completion of the
transaction, HUGHES will integrate the broadband delivery capabilities of
Telocity with DIRECTV, the nation's leading provider of digital multichannel
entertainment, to create a "whole house" entertainment and information solution
that can deliver digital video and high-speed data throughout the home for
existing and future DIRECTV customers on a nationwide basis.
"By bundling Telocity's capabilities with the high-quality offerings of
DIRECTV, we will offer consumers the best of both worlds - digital satellite
entertainment and high-speed DSL Internet access - through a single portal into
their homes," said Eddy W. Hartenstein, senior executive vice president of
HUGHES. "We will initially target the new service to DIRECTV's existing base of
more than 9 million customers, and then leverage our nationwide distribution
network to market a bundled video and broadband service offering to prospective
customers at retail."
Hartenstein added that the bundled service offering is expected to provide
DIRECTV with the opportunity to further increase customer satisfaction and
retention, and increase revenue per household.
HUGHES also expects to benefit in the future from the synergies of having a
single, nationwide home service network installing DIRECTV, DirecPC, and
Telocity DSL, and from a "single point of contact" customer service organization
for the future digital television or broadband needs of DIRECTV customers.
Telocity of Cupertino, Calif., has an expandable service network that
currently extends across 140 U.S. metropolitan areas, which account for 40
percent of the country's population. As the availability of DSL increases to
encompass more communities, Telocity's services will become available to a
larger population.
Telocity has developed a proprietary in-home gateway unit that is self-
installable on a home computer and configures itself without the need of a
network interface card, or an in-home service call. The gateway enables
customers to purchase additional services such as data security, automatic
backup, home networking and Internet Protocol telephony. In November, Telocity
became the first residential DSL services provider to offer a package of value-
added services to its customers to enable home networking and increased computer
security.
Telocity's plug-and-play capability enables Internet access with typical
download speeds of 500 Kbps (kilobits per second) to 1.5 Mbps (megabits per
second) and upload, such as for sending e-mail, of 128-256 Kbps.
Telocity's broadband services and home gateway technology also complement
DIRECTV's television-based interactive services, such as AOLTV and UltimateTV,
by providing home networking functionality and speeding up the Internet
connection. The unique capabilities of Telocity's home gateway can be integrated
into a DIRECTV receiver.
Additionally, the Telcocity network can be supplemented by NET-36, a
service that enables bandwidth-rich content providers to bypass the Internet
congestion that slows down transmission speeds and causes significant video
quality distortion. The broadcast of digital and
<PAGE>
streaming media over NET-36 will be near digital television quality, with the
same high fidelity that the content providers intended.
NET-36 is part of PanAmSat Corporation, which owns and operates the world's
largest network of geostationary-orbiting satellites. PanAmSat is 81 percent
owned by HUGHES.
DirecPC was developed by HUGHES Network Systems and provides users with
secure and reliable broadband services via satellite. The DirecPC system is used
by such Internet providers as AOL, Juno and Earthlink to provide rich multimedia
content and features to consumers through the Powered by DirecPC service.
DIRECTV, HUGHES Network Systems and PanAmSat are operating businesses of
HUGHES, a unit of General Motors Corporation. The earnings of HUGHES are used to
calculate the earnings per share attributable to the General Motors Class H
common stock (NYSE:GMH).
Telocity is a leading nationwide provider of integrated residential
broadband services. Telocity improves today's dial-up, or narrowband, experience
through faster and reliable services that enhance Internet surfing, shopping,
and communications. Telocity intends to expand its broadband services to
packaged value-added services that may include secure telecommuting, home
monitoring and automation, voice bundling, and entertainment services. Telocity
currently provides high-speed broadband services through DSL technology. As
Telocity expands its services nationwide, the company intends to choose the most
reliable, flexible and cost-effective broadband access technologies (including
DSL, cable, and wireless) available in each local market. For more information,
contact Telocity at phone (408) 863-6600; fax (408) 777-1451; www.telocity.net,
or mail at 10355 N. DeAnza Blvd.; Cupertino, CA 95014.
Media and Analysts Conference Calls
HUGHES and Telocity are holding several conference calls to discuss today's
announcement.
Telocity will conduct a call with analysts at 10 a.m. EST today. Reporters
are invited to participate in a listen-only mode. The call-in number is 719-457-
2661. The call will be available on replay for 30 days at 719-457-0820 (passcode
643606), and via webcast at www.telocity.net in the Investors' Section.
HUGHES will conduct a call with analysts at 11 a.m. EST today. Reporters
are invited to participate in a listen-only mode. The call-in number is 719-457-
2630 (confirmation code 693343). The call will be available on replay until 1
a.m. EST Dec. 29. The replay number is 719-457-0820 (confirmation code 693343).
A live webcast will also be available and archived for 30 days at www.hughes.com
HUGHES and Telocity will also host a media question and answer session from
12:30 p.m. to 1:30 p.m. EST today. Non-media can participate in a listen-only
mode. Available for questions on the call will be:
<PAGE>
Michael T. Smith, chairman and CEO of HUGHES
Eddy Hartenstein, senior executive vice president of HUGHES
Patti Hart, president and CEO of Telocity.
The call-in number is 719-457-2681, and the confirmation code is 736906. The
call will be available on replay until 1 a.m. EST Dec. 29. The replay number is
719-457-0820 with the same confirmation code.
Acquisition Details
Under the terms of the agreement, a corporation recently formed by HUGHES
will make a tender offer to purchase all currently outstanding shares of common
stock of Telocity at a price of $2.15 per share in cash. The tender offer will
be subject to certain conditions, including the tender, without withdrawal prior
to the expiration of the offer, of at least a majority of Telocity's outstanding
shares on a fully diluted basis and receipt of all necessary governmental
approvals. Stockholders representing [53]% of the outstanding shares of Telocity
have irrevocably committed to tender their shares in the tender offer.
The tender offer, which is expected to commence by February 1, 2001 and
expire no later than April 2, 2001, unless extended, will be followed by a
second step merger in which those shares not tendered will be converted into the
right to receive the same $2.15 per share in cash. Also, to provide interim
funding to Telocity, HUGHES has agreed to advance up to $20 million prior to the
completion of the tender offer. Following completion of the tender offer, HUGHES
will be entitled to designate a majority of the Board of Directors of Telocity.
If 90% of the outstanding shares of Telocity common stock are tendered and
purchased pursuant to the offer, the second step merger can be completed
thereafter without a vote or meeting of Telocity's stockholders.
Telocity stockholders are advised to read the tender offer statement and
the solicitation/recommendation statement regarding the acquisition referenced
in this press release, which will be filed with the Securities and Exchange
Commission upon the commencement of the tender offer. The tender offer statement
(including an offer to purchase, letter of transmittal and related tender offer
documents) and the solicitation/recommendation statement will contain important
information which should be read carefully before any decision is made with
respect to the offer. Telocity stockholders may obtain a free copy of the tender
offer statement and the solicitation/recommendation statement when it is
available and other documents filed by HUGHES and Telocity with the SEC at the
SEC's Web site at www.sec.gov. The tender offer statement and the
solicitation/recommendation statement and these other documents may also be
obtained by Telocity stockholders without cost to them from HUGHES and Telocity.
Safe Harbor
Hughes Electronics Corporation believes that some of the foregoing
statements may constitute forward-looking statements. When used in this report,
the words "estimate," "plan," "project," "anticipate," "expect," "intend,"
"outlook," "believe," and other similar expressions are intended to identify
such forward-looking statements and information. Important factors that may
cause actual results of HUGHES to differ materially from the forward-looking
statements in this report are set forth in the Form 10-Ks filed with the SEC by
GM and Hughes.
<PAGE>
Telocity states that investors are cautioned that statements that are not
strictly historical constitute forward-looking statements, including, without
limitation, statements regarding value-added services and the expectations
therefor, current or future financial performance, management's plans and
objectives for future operations, product plans and performance, management's
assessment of market factors, and statements regarding the strategy and plans of
Telocity and its strategic partners. In accordance with the Private Securities
Litigation Reform Act of 1995, important factors that could cause Telocity's
actual results to differ materially from those expressed or implied by such
forward-looking statements include but are not limited to the pending
acquisition of Telocity by Hughes, the highly competitive and evolving nature of
the broadband market, the successful deployment of Telocity's rollout plans and
strategies, customer demand for Telocity's services in target markets, the
pricing environment for Telocity's basic and value-added services, and the
success of the company's strategic relationships. Readers are encouraged to
review Telocity's recent filings with the Securities and Exchange Commission,
including Telocity's current quarterly report on Form 10-Q, Registration
Statement on Form S-8, prospectus filed under Rule 428(b)(4), final> amended
Registration Statement on Form S-1, and its other filings with the Securities
and Exchange Commission, copies of which may be accessed through the SEC's web
site at http://www.sec.gov. Descriptions of risk factors are not intended to be
complete.
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