John Malone's Liberty Broadband To Be Acquired By Charter In All-Stock Deal

Core Viewpoint - Charter Communications has agreed to acquire Liberty Broadband, a strategic move by John Malone, which is expected to enhance shareholder value and liquidity for both companies [1][8]. Group 1: Acquisition Details - Each holder of Liberty Broadband common stock will receive 0.236 shares of Charter common stock for each share of Liberty Broadband held [2]. - Holders of Liberty Broadband preferred stock will receive newly issued Charter preferred stock that mirrors the current terms of Liberty Broadband's preferred stock [3]. - Liberty Broadband's main assets include approximately 45.6 million common shares of Charter and its subsidiary GCI, which will be spun off to Liberty Broadband's stockholders before the acquisition closes [4]. Group 2: Financial Implications - The deal involves the repayment or assumption of Liberty Broadband's $2.6 billion debt (excluding GCI debt) and $180 million of preferred equity that will convert to Charter preferred equity [7]. - Charter expects to retire about 45.6 million shares currently owned by Liberty Broadband and issue approximately 34 million shares to Liberty Broadband common stockholders, resulting in a net decrease of about 11.5 million Charter shares outstanding [6]. Group 3: Tax Considerations - The GCI distribution is expected to be taxable, with Charter bearing the corporate tax liability upon completion of the acquisition, subject to a tax receivables agreement for any excess tax liability over $420 million [5]. Group 4: Strategic Outlook - Charter's CEO expressed gratitude for the partnership with Liberty Broadband and highlighted the potential for value creation under the leadership of Chris Winfrey [8]. - John Malone indicated that the deal would address Liberty Broadband's trading discount and enhance liquidity for shareholders, projecting a closing date in 2027 [8].