Liberty to buy stake in Charter Communications

Englewood, Colorado: Liberty Media said on Tuesday that it will buy a 27.3 per cent stake in the cable TV provider Charter Communications for about $2.62 billion. The Englewood, Colorado-based holding company controlled by billionaire John Malone said it agreed on a deal with investment funds tied to Apollo Management, Oaktree Capital Management and Crestview Partners to buy about 26.9 million shares and about 1.1 million warrants in Charter.

Liberty Media Corp. paid $95.50 per share, which represents an about 3 per cent discount to Charter’s Monday closing stock price. The deal is expected to close in the first half of the second quarter of 2013. Charter provides cable, internet and phone service to more than 5 million customers in 25 states. Liberty said it plans to fund the purchase with a combination of cash on hand and new loans.

As part of the deal, Liberty will get to nominate four people to the company’s board. It expects its nominees to include Malone, Liberty President and CEO Gregory Maffei, Liberty Global Inc. executive Nair Balan and Barnes & Noble Inc. CFO Michael Huseby.

Four current members of Charter’s board will resign.

The 72-year-old Malone is a billionaire who made his fortune by becoming chief executive of Denver-based Tele-Communications Inc. in 1973. After rescuing the cable TV company from near bankruptcy, he sold it to AT&T for $48 billion in 1998.