A Colorado investment group will pay $2.62 billion for a 27 percent stake in Charter Communications Inc., which recently moved its headquarters to Stamford from St. Louis with the help of state incentives.
Charter Communications, the country”™s fourth-largest cable operator, has pledged to create at least 200 jobs in Connecticut as part of its participation in Gov. Dannel P. Malloy”™s “Next Five” economic development program that awards companies for relocating to or expanding within Connecticut.
Liberty Media Corp. has agreed to acquire about 26.9 million shares and about 1.1 million warrants in Charter Communications from private equity funds managed by or affiliated with Apollo Management, Oaktree Capital Management and Crestview Partners.
Observers say the investment represents a significant vote of confidence in Charter Communications, whose shares have almost tripled in value since late 2009 when the company emerged from bankruptcy protection.
The Englewood, Colo., company owns SiriusXM, Atlanta National League Baseball Club Inc. and TruePosition Inc., has interests in Live Nation Entertainment and Barnes & Noble, and has minority equity investments in Time Warner Inc. and Viacom, among other communications and entertainment businesses.
Upon closing of the transaction, which is expected to occur in the second quarter of this year, Crestview and Oaktree will hold about 7.4 percent and 2.2 percent, respectively, of Charter”™s common shares.
Under the agreement, Liberty Media is able to designate up to four directors for appointment to the Charter board, likely replacing four current board members.
“Liberty Media and (Chairman) John Malone have a well-proven track record in our industry and in creating shareholder value,” said Tom Rutledge, CEO and president of Charter, in a March 19 statement. “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. ”¦ All of us at Charter appreciate the contributions of Apollo, Oaktree and Crestview, which put us on a path for sustainable success.”
Apollo, Oaktree and Crestview are among four firms that inherited most of Microsoft co-founder Paul Allen”™s stake in Charter Communications under the company”™s November 2009 bankruptcy reorganization plan. At the time, Allen had held a 91 percent stake in the company, but that was reduced to a 2 percent stake in the reorganized Charter Communications.
Liberty Media Chairman John Malone said in a statement that the firm was “pleased with Charter”™s market position and growth opportunities.”
Added CEO Greg Maffei: “Tom Rutledge and his team have done an impressive job of turning around Charter”™s operations and improving its financial position.”
Rutledge, who was named CEO of Charter in February 2012, previously served as chief operating officer of competitor Cablevision Systems Corp., which is based on Long Island, N.Y.
