QVC Group to Become Asset-Backed
Stock
Liberty Interactive Corporation (“Liberty Interactive”) (Nasdaq:
QVCA, QVCB, LVNTA, LVNTB) and General Communication, Inc. (“GCI”)
(Nasdaq: GNCMA) today announced that they have entered into a
definitive agreement (the "Agreement") whereby Liberty Interactive
will acquire GCI through a reorganization in which certain Liberty
Ventures Group (“Liberty Ventures”) assets and liabilities will be
contributed to GCI in exchange for a controlling interest in GCI.
Liberty Interactive will then effect a tax-free separation of its
controlling interest in the combined company (to be named GCI
Liberty, Inc. (“GCI Liberty”)) to the holders of Liberty Ventures
common stock in full redemption of all outstanding shares of such
stock.
“We are pleased to announce this transaction with GCI,” said
Greg Maffei, Liberty Interactive President and CEO. “GCI is the
largest communications provider in Alaska, generates solid cash
flow with upside potential and is a strong fit with the largest
businesses in Liberty Ventures. This transaction will ultimately
create a standalone Liberty Ventures, reducing the tracking stock
discount and enabling an asset-backed QVC Group.”
“This transaction with Liberty Interactive brings GCI back full
circle, as GCI was part of TCI until 1986. We couldn’t think of a
better owner, and look forward to being the largest operating asset
within GCI Liberty,” said Ron Duncan, GCI President and CEO. “We
will continue to run the company with our focus on providing the
best value for Alaska customers, offering opportunities for our
employees and investing wisely in the Alaska market.”
Liberty Interactive believes the creation of GCI Liberty will
provide the following benefits:
- Reduce Liberty Ventures tracking stock
discount
- Provide greater flexibility for GCI
Liberty to pursue future strategic transactions
- Produce strong free cash flow allowing
for potential stock repurchases
- Establish a strong currency that will
be a more effective tool for management compensation and
retention
- Provide financial flexibility for
future borrowings
Liberty Interactive believes an asset-backed QVC Group will
provide the following benefits:
- Establish leading pure play discovery
based retail and eCommerce company
- Liberty Interactive expected to be
renamed QVC Group, Inc.
- Make QVC Group eligible for possible
inclusion in stock indices through elimination of tracking stock
structure
- Reduce the tracking stock discount
- Increase near-term and annual liquidity
through reattribution (discussed below) of approximately $329
million(1) of cash and approximately $130 million annual free cash
flow from tax savings related to exchangeable bonds that will grow
- Cash can be used for investments, stock
repurchases and debt reduction
- Establish a strong currency that will
be a more effective tool for management compensation and retention
and for potential future acquisitions
- Maintain strong ability and liquidity
to service all debt
GCI believes this transaction will provide the following
benefits to its shareholders:
- Provides immediate premium over GCI’s
current stock price
- Continued participation in the growth
of the business through equity ownership of GCI Liberty
- Increased scale and resources to
execute on strategy
- Tax efficient transaction
- Diversifies business beyond Alaska
- Increased liquidity with access to
resources of larger company
Shareholders of GCI will receive total consideration of $32.50
per share comprised of $27.50 per share in GCI Liberty Class A
common stock and $5.00 in newly issued Series A preferred shares,
based on a Liberty Ventures reference price of $43.65. The Series A
preferred shares will accrue dividends at an initial rate of 5% per
annum (which would increase to 7% in connection with a future
reincorporation of GCI Liberty in Delaware) and will be redeemable
upon the 21st anniversary of the closing. There will be no premium
paid on the GCI Class B shares. The transaction represents an
undiluted enterprise value for GCI of $2.68 billion and undiluted
equity value of $1.12 billion. GCI Liberty will remain an Alaska
corporation as of the closing; however, it is currently
contemplated that as soon as practicable following the closing, a
special meeting of GCI Liberty shareholders will be called for the
purpose of voting upon a proposal to reincorporate in Delaware.
Upon completion of the contribution of Liberty Interactive’s
entire equity interests in Liberty Broadband, Charter, LendingTree,
Inc., together with the Evite operating business and certain other
assets and liabilities (including, subject to certain conditions,
the FTD Companies, Inc. equity interest), Liberty Interactive will
acquire a 77% undiluted equity interest and 84% undiluted voting
interest in GCI Liberty, comprised of a number of shares of GCI
Liberty Class A common stock and GCI Liberty Class B common stock
equal to the number of shares of Liberty Ventures Series A and
Series B common stock, respectively, outstanding as of the
contribution. Promptly following the contribution, holders of
Liberty Ventures common stock will receive one share of the
corresponding series of GCI Liberty common stock in redemption for
each share of Liberty Ventures stock held at the time of the
redemption. As a result, upon completion of the transaction, former
GCI shareholders will own 23% of the undiluted equity and 16% of
the undiluted voting power of GCI Liberty, and former Liberty
Ventures shareholders will own the remaining equity and voting
interests in GCI Liberty. GCI Liberty’s Class A common stock, Class
B common stock and Series A preferred stock are expected to be
listed on The Nasdaq Stock Market under the symbols “GLIBA,”
“GLIBB” and “GLIBP,” respectively. It is currently contemplated
that, prior to the completion of the contribution, the following
assets and liabilities, among others, will be reattributed from
Liberty Ventures to QVC Group:
- Exchangeable debentures with maturities
in 2029, 2030, 2031 and 2043, including tax attributes and
recapture liabilities, and certain of the exchangeable bonds
maturing in 2046 (as described below)
- Portfolio of green energy
investments
- Approximately $329 million in cash
(based on current valuations)(1)
- Liberty Interactive’s entire equity
interest in ILG (currently 16.6 million shares)
- Tax attributes related to equity awards
from prior spins
- De Minimis amounts of Time Inc. and
Time Warner Inc. shares
Also, prior to the split-off of GCI Liberty, GCI Liberty intends
to execute and draw down in full on a $500 million margin loan
against its 42.7 million Series C shares of Liberty Broadband.
Concurrent with the split-off, a portion of proceeds drawn on the
margin loan may be distributed to Liberty Interactive to be used
within one year for the repurchase of QVC Group stock or to pay
down debt. The amount of such proceeds depends upon the portion of
Liberty Interactive’s 1.75% Charter exchangeable debentures that
are not exchanged for mirror debentures of GCI Liberty (as
described below).
After the transaction, total debt at GCI Liberty is expected to
consist of the $500 million margin loan against Liberty Broadband
shares, $750 million of Liberty Interactive’s 1.75% Charter
exchangeable debentures (other than debentures not exchanged as
described below) and approximately $1.5 billion of existing GCI
debt.
The split-off of Liberty Interactive’s interest in GCI Liberty
is expected to be completed by the first quarter of 2018. The
completion of the GCI acquisition and split-off are subject to
certain conditions, including (i) the expiration or termination of
the applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act, (ii) regulatory approvals, including from the
Federal Communications Commission and the Regulatory Commission of
Alaska, (iii) approval by 2/3 of the outstanding voting power of
GCI, together with 2/3 of each of the GCI Class A common stock and
GCI Class B common stock, and (iv) approval by a majority of the
outstanding voting power of the Liberty Ventures Group common stock
present and entitled to vote on the redemption. Donne Fisher,
former Chairman of the Board of GCI, and Ron Duncan, GCI’s
President and CEO, will join the GCI Liberty Board of
Directors.
In connection with the closing, Liberty Interactive will offer
to exchange any or all of its outstanding 1.75% Charter
exchangeable debentures due 2046 for mirror debentures of GCI
Liberty. After closing, QVC Group will guarantee GCI Liberty’s
payment obligations under the mirror debentures through October 5,
2023 (including any payment obligations relating to mirror
debentures that are put, exchanged or redeemed on or before such
date) in exchange for a guarantee fee, and GCI Liberty and LV
Bridge LLC (a subsidiary of GCI Liberty) will provide an indemnity
to QVC Group for any payments made in respect of the guarantee,
supported by a negative pledge by LV Bridge LLC on the portion of
the Charter shares referenced by the mirror debentures. With
respect to any Liberty Interactive exchangeable debentures not
tendered in the exchange offer, GCI Liberty will provide to QVC
Group an indemnity with respect to any payments made by QVC Group
in excess of stated principal and interest to any holder of the
exchangeable debentures that exercises its exchange right under the
terms of the debentures.
The repurchase authorization for Liberty Interactive as of
February 1, 2017 was approximately $1,026 million, of which $376
million can be applied to repurchases of either QVC Group or
Liberty Ventures stock and $650 million can only be applied to
Liberty Ventures stock.
J.P. Morgan is serving as financial advisor and Baker Botts LLP
is serving as legal advisor to Liberty Interactive.
Important Notice: Liberty Interactive (Nasdaq: QVCA, QVCB,
LVNTA, LVNTB) President and CEO, Greg Maffei and General
Communication, Inc. (Nasdaq: GNCMA) President and CEO, Ron Duncan,
will discuss this transaction in a conference call which will begin
at 9:00 a.m. (E.S.T.) on April 4, 2017. The call can be accessed by
dialing (800) 274-0251 or (719) 457-2086, with participant passcode
4758381 at least 10 minutes prior to the start time. An
accompanying presentation will be posted to the Liberty Interactive
website prior to the call. The call will also be broadcast live
across the Internet and archived on our website. To access the
webcast go to http://www.libertyinteractive.com/events. Links to
this press release will also be available on Liberty Interactive's
website.
Forward-Looking Statements
This press release includes certain forward-looking statements,
including statements about the proposed acquisition of GCI by
Liberty Interactive and the proposed split-off of Liberty
Interactive’s interest in GCI Liberty (the “proposed split-off” and
together with the proposed acquisition of GCI, the “proposed
transactions”), the timing of the proposed transactions, the
contemplated reincorporation of GCI Liberty, the proposed
reattribution of assets and liabilities at Liberty Interactive in
connection with the proposed transactions, the renaming of Liberty
Interactive, GCI Liberty’s entry into a margin loan arrangement
prior to the completion of the proposed split-off, Liberty
Interactive’s anticipated offer to exchange any or all of its
outstanding 1.75% Charter exchangeable debentures, the realization
of estimated synergies and benefits from the proposed transactions,
business strategies, market potential, future financial prospects
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 satisfaction of conditions to the proposed
transactions. These forward-looking statements speak only as of the
date of this press release, and each of Liberty Interactive and GCI
expressly disclaim 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 or GCI’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
and GCI, including the most recent Forms 10-K, for additional
information about Liberty Interactive and GCI and about the risks
and uncertainties related to the business of each of Liberty
Interactive and GCI which may affect the statements made in this
press release.
Additional Information
Nothing in this press release shall constitute a solicitation to
buy or an offer to sell shares of GCI Liberty, GCI common stock or
any of Liberty Interactive’s tracking stocks. The offer and sale of
shares in the proposed transactions will only be made pursuant to
GCI Liberty’s effective registration statement. Liberty Interactive
stockholders, GCI stockholders and other investors are urged to
read the registration statement and the joint proxy
statement/prospectus to be filed regarding the proposed
transactions 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 proposed
transactions. 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 Interactive Corporation, 12300 Liberty Boulevard,
Englewood, Colorado 80112, Attention: Investor Relations,
Telephone: (720) 875-5420. GCI investors can access additional
information at ir.gci.com.
Participants in a Solicitation
The directors and executive officers of Liberty Interactive and
GCI and other persons may be deemed to be participants in the
solicitation of proxies in respect of proposals to approve the
proposed transactions. Information regarding the directors and
executive officers of Liberty Interactive is available in its
definitive proxy statement, which was filed with the SEC on July 8,
2016, and certain of its Current Reports on Form 8-K. Information
regarding the directors and executive officers of GCI is available
as part of its Form10-K filed with the SEC on March 2, 2017. For
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 available in
the proxy materials regarding the foregoing to be filed with the
SEC. Free copies of these documents may be obtained as described in
the preceding paragraph.
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 Corporation's subsidiaries, QVC, Inc. and zulily, llc,
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
interests in Liberty Broadband Corporation and FTD, Liberty
Interactive Corporation's subsidiary Evite, and minority interests
in ILG, Lending Tree and Charter Communications.
About General Communication,
Inc.
GCI is the largest communications provider in Alaska, providing
data, wireless, video, voice, and managed services to consumer and
business customers throughout Alaska and in the lower 48 states.
Headquartered in Alaska, GCI 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. Learn more about GCI
at www.gci.com.
(1) Exact cash amount to be determined at closing.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170404005774/en/
Liberty Interactive CorporationCourtnee Chun,
720-875-5420orGeneral Communication, Inc.Investor
Contact:Kyle Jones, 907-868-7105orMedia Contact:Heather Handyside,
907-301-3481
Gci Liberty, Inc. (delisted) (NASDAQ:GNCMA)
Graphique Historique de l'Action
De Déc 2024 à Jan 2025
Gci Liberty, Inc. (delisted) (NASDAQ:GNCMA)
Graphique Historique de l'Action
De Jan 2024 à Jan 2025
