|
Mavis Scanlon
Liberty Media Group extracted better terms for its complex transaction with United-GlobalCom and United Pan-Europe Communications, and now it's trying to achieve the same in its negotiations with Deutsche Telecom.
The cable and programming arm of AT&T, expected to gain its independence from AT&T in the next two months, is trying to obtain a better price for its purchase of 55% stakes in six of Deutsche Telecom's cable operations. In February, the companies agreed to a total purchase price of $2 billion.
On Tuesday, Liberty chairman John Malone told analysts the two firms to continue to negotiate and said that he anticipates the transaction will be completed.
In the UnitedGlobalCom and United Pan-Europe Communications transactions, Liberty effectively gains a larger stake and downside protection, while keeping its own cash contribution to the deal essentially the same.
Liberty and UnitedGlobalCom, which owns 53% of United Pan-Europe Communications, the largest pan-European broadband communications company, will form a new holding company to own United and the assets contributed by Liberty. That new company will issue 60 million shares to Liberty ? a stake that's been upped from the 54.1 million in the previous agreement. Depending on the share prices of United and its subsidiaries, Liberty may receive up to 26.5 million additional shares of the new company.
Another change is in the investment Liberty will make in United Pan-Europe Communications ? Liberty will now make that investment in the form of a convertible loan that is exchangeable into shares of UPC.
The finalized terms mean both Liberty and UnitedGlobalCom can breathe a sigh of relief that the deal is done, says Merrill Lynch's media-research team and also means Malone and Liberty can turn their full attention to the Deutsche Telecom deal. Gaining control of the German cable systems means Liberty will be able to roll out new services in Europe's largest television market.
Back to this issue
|
