More reports on: M&A
Liberty Media to buy 27.3 % in US cable TV operator Charter Communications for $2.62 bn news
20 March 2013

US billionaire John Malone-controlled Liberty Media Corp yesterday said that it will buy a 27.3 per cent stake in cable television operator Charter Communications Inc for about $2.62 billion.

Colorado-based Liberty Media will buy the stake from Apollo Management, Oaktree Capital Management and Crestview Partners, the companies said in a joint statement.

Liberty Media will pay $95.50 for each Charter share, a discount of 2.6 per cent to Charter's Monday closing price of $98.04.

The deal comes a month after Liberty Media's European arm Liberty Global agreed to buy UK cable operator Virgin Media Inc in a $15.75-billion in a cash and stock deal. Including debt, the deal is valued more than $23 billion. (See: Liberty Global strikes Virgin Media deal for $15.75 bn) 

In early March, Apollo Global and Oaktree had announced plans to sell about 6.2 million and 3.1 million of Charter shares respectively in an offering underwritten by Goldman Sachs.

Under the deal, Liberty Media has agreed to not raise its stake in Charter above 35 per cent until January 2016 and 39.99 per cent thereafter.

''We are pleased with Charter's market position and growth opportunities and believe that the company's investments in its high-capacity digital network which provides digital HD and on demand television, high-speed data and voice, will benefit its customers and shareholders alike,'' Malone said in a statement.

Saddled with debt of around $22 billion, Connecticut-based Charter had filed for Chapter 11 bankruptcy protection in March 2009, emerged from it in November 2009 the same year.

With a market cap of $9.9 billion, Nasdaq-listed Charter provides advanced video, high-speed internet, and telephone services to about 5.2 million residential and business customers in 25 US states.

Last month it agreed to acquire Cablevision System Corp's western cable asset Optimum West for $1.63 billion.

Colorado-based Liberty Media owns interests in a broad range of media, communications and entertainment businesses. Its subsidiaries include premium home entertainment provider Starz, Atlanta National League Baseball Club, and location service provider True Positon.

The company also has stakes in satellite radio service provider SiriusXM Radio Inc, concert firm Live Nation Entertainment Inc, book retailer Barnes & Noble Inc as well as minority interests in media and entertainment giants Time Warner Inc and Viacom.

Over the last few years, Malone, who made his fortune by selling the company he founded Tele-Communications to AT&T for $48 billion in 1998, has restructured his media empire into several smaller businesses, to improve efficiency and obtain tax benefits.

In November 2011, Liberty Media spun off its video and online commerce businesses, including QVC, Backcountry.com and Bodybuilding.com, to form Liberty Interactive and last year spun off its premium cable business Starz LLC to a separately traded company.

The Starz spin-off left Liberty Media with about $1.8 billion in cash and debt free, giving it a free hand to make large acquisitions.





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Liberty Media to buy 27.3 % in US cable TV operator Charter Communications for $2.62 bn