John Malone is seeking to simplify his cable TV portfolio as his Liberty Broadband seeks to merge with Constitution Communications – each corporations through which he holds important stakes.
The information was launched after the market closed on September 23. Liberty Broadband shares rose 26% on Tuesday, whereas Constitution shares fell 2.5%.
Malone owns 49% of the voting rights of Liberty Broadband, which owns 26% of Constitution and in addition owns Alaska telecommunications firm GCI. On Monday, Liberty Broadband introduced a counterproposal to a particular committee of Constitution’s board of administrators in response to the preliminary merger proposal despatched by the particular committee on Sept. 15.
“Liberty’s proposed transaction will rationalize the twin company construction between Constitution and Liberty Broadband, improve transaction liquidity and eradicate Liberty Broadband’s present governance rights,” Liberty Broadband President and CEO Greg Maffei mentioned in an announcement. “Dedication of future transactions This can present our shareholders with readability and proceed our robust relationship with Constitution throughout this era. ”
Relating to GCI, Maffei added: “Constitution will purchase a pretty enterprise that’s Alaska’s main connectivity platform with important alternatives for future worth creation. We stay up for getting into right into a mutually agreeable transaction to the advantage of all Associated events.
Constitution declined to touch upon the proposed Liberty Broadband deal.
In a Sept. 15 letter to Malone and Maffei included in Liberty Broadband’s SEC submitting, Constitution President and CEO Chris Winfrey outlined the rationale for merging the 2 entities. “As you highlighted to us, Liberty Broadband has traditionally traded at a reduction to web asset worth, partially as a result of its holding firm construction. In that spirit, we’re happy to enter into an settlement with Constitution and Liberty within the all-stock transaction described under Broadband is providing this non-binding proposal,” Winfrey wrote. “We consider this proposal represents a compelling alternative for Liberty Broadband to simplify its construction and meaningfully scale back reductions, thereby offering larger worth, certainty and finally, to Liberty Broadband shareholders Better mobility.
Underneath the phrases initially proposed by Constitution, Liberty Broadband shareholders would obtain 0.228 of a newly issued share of Constitution frequent inventory for every share of Liberty Broadband frequent inventory. Winfrey mentioned within the letter that the speed “assumes Liberty Broadband disposes of GCI earlier than the transaction closes,” however added, “Alternatively, we’re open to discussing phrases of the transaction that would come with GCI.”
In its counterproposal, Liberty Broadband outlined the phrases of the proposed merger of Liberty Broadband and Constitution in an all-stock transaction “supposed to be tax-free.” Underneath the proposal, holders of every collection of Liberty Broadband frequent inventory would obtain 0.2900 shares of Constitution Class A typical inventory for every collection of shares of Liberty Broadband frequent inventory. The time limit for the proposed transaction is June 30, 2027, or “an earlier date mutually agreed upon by the events.”
Underneath the phrases of the counterproposal, Constitution will assume or refinance Liberty Broadband’s debt and Liberty Broadband’s issued most popular inventory “on or earlier than closing.”
Liberty Broadband mentioned that pending the end result of merger negotiations, Liberty Broadband (together with GCI) will “function in accordance with the traditional course of enterprise.” Amongst different issues, the proposed transaction can be topic to approval by “a majority of Liberty Broadband’s shareholders who will not be affiliated with John Malone and its associates.” It is going to even be topic to customary closing situations, together with needed regulatory approvals and relevant tax opinions.
