Liberty Broadband Corporation (“Liberty
Broadband”) (NASDAQ: LBRDA, LBRDK) and GCI Liberty, Inc.
(“GCI Liberty”) (NASDAQ: GLIBA, GLIBP)
announced today that they have entered into a definitive merger
agreement under which Liberty Broadband has agreed to acquire GCI
Liberty in a stock-for-stock merger (the “Combination”).
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20200806005929/en/
“This process was driven by independent special committees of
Liberty Broadband and GCI Liberty, and John Malone and I fully
endorse the combination,” said Greg Maffei, Liberty Broadband and
GCI Liberty President and CEO. “The transaction is financially
attractive and beneficial for both companies.”
Liberty Broadband’s businesses consist of its interest in
Charter Communications, Inc. (“Charter”) and its subsidiary Skyhook. Liberty
Broadband also announced today that its Board of Directors
increased its repurchase authorization by $1 billion, bringing
total authorization to $1.2 billion.
GCI Liberty’s principal assets consist of its subsidiary GCI
Holdings, LLC and non-controlling interests in Liberty Broadband,
Charter Communications, Inc., and LendingTree, Inc.
Liberty Broadband and GCI Liberty believe the Combination will
provide the following benefits to all shareholders:
- Generate savings on public company and overhead costs
- Simplify administrative and management complexity
- Aim to reduce trading discounts to underlying equities
- Improve flexibility for future strategic combinations
Liberty Broadband believes benefits of the Combination
include:
- Issuing Liberty Broadband equity to take advantage of the more
discounted GCI Liberty equity
- Accretive to NAV per share
- Acquiring an attractive incremental cable asset with synergy
potential
- Additional operating asset with free cash flow provides
potential for incremental share repurchase
- Strengthening trading liquidity in LBRDK
GCI Liberty believes the Combination will provide the following
benefits:
- Tie GCI Liberty’s future to the more strategic Liberty
Broadband
- Premium to the trading price
- Elimination of the “double-discount” through the LBRDK
stake
- Ongoing participation in attractive Charter
- Elimination of corporate level tax on the LBRDK gain
- More liquid currency
- Larger, stronger balance sheet
Under the terms of the merger agreement:
- Each holder of GLIBA will receive 0.580 of a share of
LBRDK
- Each holder of GLIBB will receive 0.580 of a share of
LBRDB
- Each holder of GLIBP will receive one share of Liberty
Broadband Cumulative Redeemable Preferred Stock (with mirror terms
to the current GLIBP)
- Cash to be issued in lieu of fractional shares
At the closing of the Combination:
- Former holders of the GCI Liberty common stock are expected to
own in the aggregate shares of LBRDK and LBRDB representing
approximately 30.6% of the total number of outstanding Liberty
Broadband common shares
- Former holders of GLIBP will own in the aggregate all
outstanding shares of Liberty Broadband Preferred Stock newly
issued in the Combination
- Former holders of GCI Liberty common stock and GLIBP are
expected to own, in the aggregate, approximately 16.7% of the
voting power of Liberty Broadband
The foregoing percentages are based on approximately 26.5
million shares of LBRDA, approximately 2.5 million shares of LBRDB
and approximately 153.0 million shares of LBRDK outstanding as of
July 15, 2020 and approximately 101.3 million shares of GLIBA and
approximately 4.5 million shares of GLIBB outstanding as of April
30, 2020 and approximately 7.2 million shares of GLIBP outstanding
as of March 31, 2020.
The companies expect the Combination to close in the first half
of 2021, subject to potential COVID-19 related delays.
The Combination was recommended to the Liberty Broadband Board
of Directors for approval by a special committee composed of
independent, disinterested directors and advised by independent
financial and legal advisors. The Combination was recommended to
the GCI Liberty Board of Directors for approval by a special
committee composed of independent, disinterested directors and
advised by independent financial and legal advisors.
The closing of the Combination is subject to certain customary
conditions, including:
- Adoption of the merger agreement by:
- Holders of a majority of the aggregate voting power of the GCI
Liberty outstanding stock entitled to vote thereon
- Holders of a majority of the aggregate voting power of the GCI
Liberty outstanding stock entitled to vote thereon not owned by
John C. Malone and certain other persons
- Holders of a majority of the aggregate voting power of the
Liberty Broadband outstanding stock entitled to vote thereon not
owned by John C. Malone and certain other persons
- Approval of the Liberty Broadband stock issuance by holders of
a majority of the aggregate voting power of the Liberty Broadband
outstanding stock present in person or by proxy at the stockholder
meeting and entitled to vote thereon
- The receipt of any applicable regulatory approvals
John C. Malone, the Chairman of the Board of Liberty Broadband
and GCI Liberty, and certain related holders, agreed to vote shares
beneficially owned by them, representing approximately 48.3% of the
aggregate voting power of Liberty Broadband and approximately 27.0%
of the aggregate voting power of GCI Liberty, in favor of the
Combination.
In addition, Liberty Broadband entered into an exchange
agreement with Mr. Malone pursuant to which he will waive the right
to receive LBRDB in the Combination with respect to certain shares
of GLIBB beneficially owned by him and will instead receive an
equal number of LBRDK so that Mr. Malone’s aggregate voting power
at Liberty Broadband remains at approximately 49% at the closing of
the Combination, which is equal to Mr. Malone’s current voting
power in Liberty Broadband. Following the closing, Mr. Malone would
be able to exchange shares of LBRDK on a one-for-one basis for the
waived shares of LBRDB in order to preserve his target voting power
of approximately 49% (subject to adjustment for certain transfers
by Mr. Malone) following the occurrence of certain voting dilution
events and in certain circumstances, Mr. Malone will be required to
transfer shares of LBRDB owned by him to Liberty Broadband in
exchange for an equal number of shares of LBRDK in order to
preserve the target voting power.
Perella Weinberg Partners LP is serving as exclusive financial
advisor to the special committee of Liberty Broadband, and Evercore
is serving as exclusive financial advisor to the special committee
of GCI Liberty. Debevoise & Plimpton LLP is serving as legal
counsel to the special committee of Liberty Broadband, and Morris,
Nichols, Arsht & Tunnell LLP is serving as legal counsel to the
special committee of GCI Liberty. Steptoe & Johnson LLP is
serving as independent tax counsel to the special committee of GCI
Liberty, and Skadden is serving as special tax counsel to GCI
Liberty. Baker Botts LLP is representing GCI Liberty in their
capacity as regular outside counsel.
Greg Maffei will host a conference call to discuss the
Combination on Thursday, August 6 at 5:00 pm (E.D.T.). Following
prepared remarks, the company will host a brief Q&A session.
During the call, Mr. Maffei may discuss financial performance and
outlook, as well as other forward looking matters. In addition, a
presentation has been posted to accompany the call which can be
found at http://www.libertybroadband.com/events and
http://www.gciliberty.com/events.
Please call GlobalMeet at (800) 377-1217, passcode 294336, at
least 10 minutes prior to the call. Callers will need to be on a
touch-tone telephone to ask questions. The conference administrator
will provide instructions on how to use the polling feature.
In addition, this call will be broadcast live via the Internet.
All interested participants should visit the Liberty Broadband or
GCI Liberty website at http://www.libertybroadband.com/events or
http://www.gciliberty.com/events to register for the web cast.
Links to the press release, presentation and replays of the call
will also be available on the Liberty Broadband and GCI Liberty
websites. The conference call will be archived on the website for
one year after appropriate filings have been made with the SEC.
About Liberty Broadband
Liberty Broadband Corporation’s (NASDAQ: LBRDA, LBRDK)
businesses consist of its interest in Charter Communications and
its subsidiary Skyhook.
About GCI Liberty, Inc.
GCI Liberty, Inc. (NASDAQ: GLIBA, GLIBP) operates and owns
interests in a broad range of communications businesses. GCI
Liberty’s principal assets consist of its subsidiary GCI Holdings,
LLC (“GCI Holdings”) and interests in Charter Communications, Inc.
and Liberty Broadband Corporation. GCI Holdings is Alaska’s largest
communications provider, providing data, wireless, video, voice and
managed services to consumer and business customers throughout
Alaska. GCI Holdings has delivered services for nearly 40 years to
some of the most remote communities and in some of the most
challenging conditions in North America. GCI Liberty’s other
businesses and assets consist of its subsidiary Evite, Inc. and its
interest in LendingTree, Inc.
Forward-Looking Statements
This communication includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements other than statements of historical fact
are “forward-looking statements” for purposes of federal and state
securities laws. These forward-looking statements generally can be
identified by phrases such as “possible,” “potential,” “intends” or
“expects” or other words or phrases of similar import or future or
conditional verbs such as “will,” “may,” “might,” “should,”
“would,” “could,” or similar variations. Similarly, statements
herein that describe the Combination, including its financial and
operational impact, the timing of the Combination, and other
statements of the parties’ or management’s plans, expectations,
objectives, projections, beliefs, intentions, goals, and statements
about the benefits of the Combination, stock repurchases at Liberty
Broadband, the pro forma ownership structure of Liberty Broadband
and other statements that are not historical facts are also
forward-looking statements. It is uncertain whether any of the
events anticipated by the forward-looking statements will transpire
or occur, or if any of them do, what impact they will have on the
results of operations and financial condition of the combined
companies or the price of Liberty Broadband or GCI Liberty stock.
These forward-looking statements involve certain risks and
uncertainties, many of which are beyond the parties’ control, that
could cause actual results to differ materially from those
indicated in such forward-looking statements, including, but not
limited to, the unpredictability of the commercial success of
Liberty Broadband’s or GCI Liberty’s respective businesses or
operations; potential adverse reactions or changes to business or
employee relationships, including those resulting from the
announcement or completion of the Combination; the risk that any
announcements relating to the Combination could have adverse
effects on the market price of common stock of Liberty Broadband or
GCI Liberty; market conditions conducive to stock repurchases; the
ability of the parties to consummate the Combination on a timely
basis or at all and the satisfaction of the conditions precedent to
consummation of the Combination, including, but not limited to,
approval by the stockholders of Liberty Broadband and GCI Liberty
and regulatory approvals; the possibility that the Combination may
be more expensive to complete than anticipated, including as a
result of unexpected factors or events; the ability to successfully
integrate the businesses; the ability of Liberty Broadband to
implement its plans, forecasts and other expectations with respect
to GCI Liberty’s business after the completion of the Combination
and realize expected benefits; the diversion of management’s
attention from ongoing business operations and opportunities; the
impact of COVID-19; and litigation relating to the Combination.
These forward-looking statements speak only as of the date of this
communication, and Liberty Broadband 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 Broadband’s or GCI Liberty’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 Broadband and GCI Liberty, including the
most recent Annual Reports on Form 10-K and Quarterly Reports on
Form 10-Q, for additional information about Liberty Broadband and
GCI Liberty and about the risks and uncertainties related to the
businesses of Liberty Broadband and GCI Liberty which may affect
the statements made in this communication.
Additional Information
Nothing in this communication shall constitute a solicitation to
buy or an offer to sell securities of Liberty Broadband or GCI
Liberty. The offer and sale of shares in the Combination will only
be made pursuant to Liberty Broadband’s effective registration
statement. Liberty Broadband’s stockholders, GCI Liberty’s
stockholders and other investors are urged to read the registration
statement and the joint proxy statement/prospectus to be filed
regarding the Combination and any other relevant documents filed
with the SEC, as well as any amendments or supplements to those
documents, because they will contain important information about
the Combination. Copies of these SEC filings are available free of
charge at the SEC’s website (http://www.sec.gov). Copies of the
filings together with the materials incorporated by reference
therein are also available, without charge, by directing a request
to Liberty Broadband Corporation, 12300 Liberty Boulevard,
Englewood, Colorado 80112, Attention: Investor Relations,
Telephone: (720) 875-5700 or to GCI Liberty, Inc., 12300 Liberty
Boulevard, Englewood, Colorado 80112, Attention: Investor
Relations, Telephone: (720) 875-5900.
Participants in the Solicitation
Liberty Broadband and GCI Liberty and their respective directors
and executive officers and other persons may be deemed to be
participants in the solicitation of proxies in respect of the
Combination. Information about Liberty Broadband’s directors and
executive officers is available in Liberty Broadband’s definitive
proxy statement for its 2020 annual meeting of stockholders, which
was filed with the SEC on April 10, 2020. Information about GCI
Liberty’s directors and executive officers is available in GCI
Liberty’s definitive proxy statement for its 2020 annual meeting of
stockholders, which was filed with the SEC on April 10, 2020. Other
information regarding the participants in the proxy solicitation
and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the joint
proxy statement/prospectus and other relevant materials to be filed
with the SEC regarding the Combination when they become available.
Investors should read the joint proxy statement/prospectus
carefully when it becomes available before making any voting or
investment decisions. You may obtain free copies of these documents
from Liberty Broadband and GCI Liberty as indicated above.
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version on businesswire.com: https://www.businesswire.com/news/home/20200806005929/en/
Press For Liberty Broadband: ir.libertybroadband.com For
GCI Liberty: ir.gciliberty.com Courtnee Chun, 720-875-5420
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