Charter Communications and Liberty Media Corporation Announce Agreement for Investment
STAMFORD, Conn. & ENGLEWOOD, Colo.--(BUSINESS WIRE)--
Charter Communications, Inc. (NASDAQ: CHTR) ("Charter") and Liberty
Media Corporation (NASDAQ: LMCA, LMCB) ("Liberty Media") announced today
that Liberty Media has entered into a definitive agreement with
investment funds managed by, or affiliated with, Apollo Management,
Oaktree Capital Management and Crestview Partners to acquire
approximately 26.9 million shares and approximately 1.1 million warrants
in Charter Communications, Inc. for approximately $2.617 billion, which
represents an approximate 27.3% beneficial ownership in Charter and a
price per share of $95.50. Liberty expects to fund the purchase with a
combination of cash on hand and new loan arrangements.
"We are excited to make this investment in Charter, the fourth largest
cable provider in the US," said Greg Maffei, Liberty President and CEO.
"Tom Rutledge and his team have done an impressive job of turning around
Charter's operations and improving its financial position. We look
forward to working with Charter's management team and fellow board
members in the future."
"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," said
John Malone, Liberty Chairman.
"This transaction reflects a solid endorsement of the strategy that Tom
Rutledge and his team are implementing at Charter," said Eric
Zinterhofer, Chairman of Charter. "Apollo, Oaktree, and Crestview have
created substantial value for Charter and its shareholders, and on
behalf of Charter's board, we look forward to working with Liberty Media
in creating further value."
Tom Rutledge, CEO and President of Charter, said, "Liberty Media and
John Malone have a well proven track record in our industry and in
creating shareholder value. While we have made real progress, we are
still in the beginning of our effort to transform Charter, and we
welcome the addition of Liberty Media as knowledgeable shareholders as
we grow our products, service capabilities, and market share. All of us
at Charter appreciate the contributions of Apollo, Oaktree and Crestview
which put us on a path for sustainable success."
The transaction is expected to close in the first half of the second
quarter of 2013, subject to the satisfaction of customary closing
conditions, including expiration of the waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Upon closing, funds managed by Crestview and Oaktree will hold
approximately 7.4% and 2.2%, respectively, of Charter's common shares.
Charter's board of directors appointed a special committee of
independent and disinterested directors to consider the transaction on
behalf of the company.
Charter entered into a stockholders agreement that among other things
provides Liberty Media the right to designate up to four directors for
appointment to the Charter board upon the closing of the transaction.
Liberty Media expects to designate John Malone, Chairman of Liberty
Media; Gregory Maffei, President and CEO of Liberty Media; Nair Balan,
EVP and CTO of Liberty Global; and Michael Huseby, CFO of Barnes &
Noble. Charter's board of directors will appoint these directors subject
to its normal review of director qualifications, and upon the
resignation of Stan Parker, Darren Glatt, Bruce Karsh and Edgar Lee in
connection with the closing of the transaction, which is expected to
occur sometime after Charter's 2013 annual meeting of stockholders.
Jeffrey Marcus, a partner at Crestview, will remain on the board.
Subject to Liberty Media's continued ownership level in Charter, the
stockholders agreement also provides that Liberty Media can designate up
to four directors as nominees for election to Charter's board of
directors at least through Charter's 2015 annual meeting of
stockholders, and that up to one of these individuals may serve on each
of the Audit Committee, the Nominating and Corporate Governance
Committee, and Compensation and Benefits Committee of Charter's board of
In addition, Liberty Media agreed to, among other things, not increase
its beneficial ownership in Charter above 35% until January 2016 and
39.99% thereafter. Liberty also agreed not to engage in proxy
solicitations for nominations to Charter's board of directors through
the 2015 shareholder meeting and continue to so refrain as long as its
designees are nominated to the Charter board or the agreement is earlier
terminated. Charter approved Liberty Media's acquisition of beneficial
ownership of Charter's shares under the business combination provisions
of the Delaware General Corporation Law.
The stockholder's agreement is more fully described in a Current Report
on Form 8-K to be filed with the SEC by Charter.
Liberty Media was advised by LionTree Advisors and Baker Botts L.L.P.
Charter was advised by Kirkland & Ellis LLP. Apollo was advised by Citi
and Wachtell, Lipton, Rosen & Katz. Oaktree was advised by Citi, Goldman
Sachs and Paul, Weiss, Rifkind, Wharton & Garrison LLP. Crestview was
advised by Davis Polk & Wardwell LLP.
Charter (NASDAQ: CHTR) is a leading broadband communications company and
the fourth-largest cable operator in the United States. Charter provides
a full range of advanced broadband services, including advanced Charter
TV® video entertainment programming, Charter Internet® access, and
Charter Phone®. Charter Business® similarly provides scalable, tailored,
and cost-effective broadband communications solutions to business
organizations, such as business-to-business Internet access, data
networking, business telephone, video and music entertainment services,
and wireless backhaul. Charter's advertising sales and production
services are sold under the Charter Media® brand. More information about
Charter can be found at charter.com.
About Liberty Media
Liberty Media owns interests in a broad range of media, communications
and entertainment businesses, including its subsidiaries SiriusXM,
Atlanta National League Baseball Club, Inc. and TruePosition, Inc., its
interests in Live Nation Entertainment and Barnes & Noble, and minority
equity investments in Time Warner Inc. and Viacom.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This release includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities
Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), regarding, among other things, our plans,
strategies and prospects, both business and financial, and the proposed
purchase of shares of common stock of Charter by Liberty Media from
selling stockholders. Although we believe that our plans, intentions and
expectations reflected in or suggested by these forward-looking
statements are reasonable, we cannot assure you that we will achieve or
realize these plans, intentions or expectations or that the conditions
to Liberty Media's purchase of common stock from selling stockholders
will be satisfied. Forward-looking statements are inherently subject to
risks, uncertainties and assumptions including, without limitation, the
factors described under "Risk Factors" from time to time in our filings
with the Securities and Exchange Commission ("SEC"). Many of the
forward-looking statements contained in this release may be identified
by the use of forward-looking words such as "believe," "expect,"
"anticipate," "should," "planned," "will," "may," "intend," "estimated,"
"aim," "on track," "target," "opportunity," "tentative," "positioning,"
"designed," "create," and "potential," among others. Important factors
that could cause actual results to differ materially from the
forward-looking statements we make in this release are set forth in
other reports or documents that we file from time to time with the SEC,
and include, but are not limited to:
our ability to sustain and grow revenues and cash flow from operations
by offering video, Internet, telephone, advertising and other services
to residential and commercial customers, to adequately meet the
customer experience demands in our markets and to maintain and grow
our customer base, particularly in the face of increasingly aggressive
competition, the need for innovation and the related capital
expenditures and the difficult economic conditions in the United
the impact of competition from other market participants, including
but not limited to incumbent telephone companies, direct broadcast
satellite operators, wireless broadband and telephone providers,
digital subscriber line ("DSL") providers, and video provided over the
general business conditions, economic uncertainty or downturn, high
unemployment levels and the level of activity in the housing sector;
our ability to obtain programming at reasonable prices or to raise
prices to offset, in whole or in part, the effects of higher
programming costs (including retransmission consents);
the development and deployment of new products and technologies;
the effects of governmental regulation on our business;
the availability and access, in general, of funds to meet our debt
obligations prior to or when they become due and to fund our
operations and necessary capital expenditures, either through (i) cash
on hand, (ii) free cash flow, or (iii) access to the capital or credit
our ability to comply with all covenants in our indentures and credit
facilities any violation of which, if not cured in a timely manner,
could trigger a default of our other obligations under cross-default
All forward-looking statements attributable to us or any person acting
on our behalf are expressly qualified in their entirety by this
cautionary statement. We are under no duty or obligation to update any
of the forward-looking statements after the date of this release.
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Liberty Media Corporation
Courtnee Ulrich, 720-875-5420
Anita Lamont, 314-543-2215
Source: Liberty Media Corporation
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