Liberty Interactive Corp. Announces Agreement with Liberty Broadband to Invest $2.4 billion in Support of Charter-Time Warner...
May 26 2015 - 6:11AM
Business Wire
Liberty Interactive Corporation (NASDAQ: QVCA, QVCB, LNVTA,
LVNTB) (“Liberty Interactive”) today announced that it has entered
into an agreement with Liberty Broadband Corporation (NASDAQ:
LBRDA, LBRDK) (“Liberty Broadband”) whereby Liberty Interactive
will invest $2.4 billion in Liberty Broadband in connection with
(and contingent upon) the closing of today’s announced proposed
merger of Charter Communications, Inc. (“Charter”) and Time Warner
Cable Inc. (“TWC”). The proceeds of this investment will be used by
Liberty Broadband to fund, in part, its agreement to acquire $4.3
billion of Charter stock. Liberty Broadband’s acquisition will be
made in support of (and contingent upon) the closing of the
Charter-TWC merger. In connection with these transactions, it is
expected that Charter will undergo a corporate reorganization,
resulting in a current subsidiary of Charter becoming the publicly
traded parent company (“New Charter”). Liberty Interactive’s
investment in Liberty Broadband will be funded using cash on hand
and will be attributed to the Liberty Ventures Group.
“We are excited for Liberty Interactive to make this attractive
investment in Liberty Broadband, providing our shareholders with
the unique opportunity to realize value from the proposed
consolidation in the cable industry announced today by Charter,”
said Greg Maffei, President and CEO of Liberty Interactive.
“Through this transaction, Liberty Interactive has the ability to
deploy a significant amount of capital and become a meaningful
shareholder of Liberty Broadband.”
Liberty Interactive (along with third party investors, all of
whom will invest on the same terms as Liberty Interactive) will
purchase newly issued shares of Liberty Broadband Series C common
stock (the “Series C Shares”) at a per share price of $56.23 (equal
to Liberty Broadband’s net asset value on a sum-of-the parts
basis). In the aggregate, Liberty Broadband has entered into
subscription agreements with respect to $4.4 billion of its Series
C Shares. Liberty Interactive’s investment in Liberty Broadband is
subject to customary closing conditions and funding will only occur
upon the completion of the Charter-TWC merger. Liberty Broadband
intends to seek stockholder approval for the issuance of the Series
C Shares in accordance with the rules and requirements of the
Nasdaq Stock Market. If, for any reason, Liberty Broadband does not
receive the requisite stockholder approval for the issuance of the
Series C Shares, the purchasers will instead acquire a limited
number of Series C Shares, together with shares of a newly issued
series of non-convertible preferred stock of Liberty Broadband.
Liberty Broadband and Liberty Interactive have also entered into
an agreement with Charter which provides that Liberty Broadband and
Liberty Interactive will exchange, in a tax-free transaction, the
shares of TWC common stock held by each company for shares of New
Charter Class A common stock (subject to certain limitations). In
addition, Liberty Interactive has also agreed to grant Liberty
Broadband a proxy over the shares of New Charter stock it receives
in the exchange, along with a right of first refusal with respect
to the underlying New Charter stock.
Forward-Looking Statements
This press release includes certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements about the completion of Charter’s
corporate reorganization, the TWC and Bright House acquisition
transactions, Liberty Broadband’s investment in Charter, Liberty
Broadband’s issuance of Series C Shares to Liberty Interactive and
other third party investors and other matters that are not
historical facts. These forward-looking statements involve many
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statements,
including, without limitation, the receipt of required approvals,
including stockholder and regulatory. These forward looking
statements speak only as of the date of this press release, and
Liberty Interactive expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in
Liberty Interactive’s expectations with regard thereto or any
change in events, conditions or circumstances on which any such
statement is based. Please refer to the publicly filed documents of
Liberty Interactive, including the most recent Forms 10-K and 10-Q,
for additional information about Liberty Interactive and about the
risks and uncertainties related to Liberty Interactive’s business
which may affect the statements made in this press release.
About Liberty Interactive
Corporation
Liberty Interactive Corporation operates and owns interests in a
broad range of digital commerce businesses. Those businesses are
currently attributed to two tracking stock groups: the QVC Group
and the Liberty Ventures Group. The businesses and assets
attributed to the QVC Group (Nasdaq: QVCA, QVCB) consist of Liberty
Interactive’s subsidiary, QVC, Inc., and its interest in HSN, Inc.,
and the businesses and assets attributed to the Liberty Ventures
Group (Nasdaq: LVNTA, LVNTB) consist of all of Liberty Interactive
Corporation’s businesses and assets other than those attributed to
the QVC Group, including its interest in Expedia, Interval Leisure
Group, Lending Tree and FTD, its subsidiaries Backcountry.com,
Bodybuilding.com, CommerceHub, LMC Right Start and Evite, and
minority interests in Time Warner and Time Warner Cable.
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