Charter Communications, Inc. (NASDAQ: CHTR) and Liberty Broadband Corporation (NASDAQ: LBRDA, LBRDK, LBRDP) have announced a definitive agreement for Charter to acquire Liberty Broadband in an all-stock transaction. The transaction will see each holder of Liberty Broadband common stock receive 0.236 of a share of Charter common stock per share of Liberty Broadband common stock held, with cash to be issued in lieu of fractional shares.
As a result of the transaction, Charter expects to retire the approximately 45.6 million Charter shares currently owned by Liberty Broadband and to issue approximately 34.0 million shares to holders of Liberty Broadband common stock at the closing, resulting in a net decrease of approximately 11.5 million Charter shares outstanding.
Liberty Broadband's principal assets currently consist of approximately 45.6 million common shares of Charter and its subsidiary GCI, LLC, Alaska's largest communications provider. Liberty Broadband has agreed to spin off its GCI business by way of a distribution to the stockholders of Liberty Broadband prior to the closing of the acquisition of Liberty Broadband by Charter.
The transaction is expected to close on June 30, 2027, subject to the completion of the GCI spin-off and other customary closing conditions.
In connection with the entry into the transaction, Charter, Liberty Broadband, and Advance/Newhouse Partnership have agreed to amend certain existing governance arrangements of Charter to modify the way in which Charter repurchases its shares of common stock from Liberty Broadband during the pendency of the transaction.
In addition, Charter, Liberty Broadband, and Advance/Newhouse Partnership have agreed to amend certain existing governance arrangements of Charter to, among other things, modify the way in which Charter repurchases its shares of common stock from Liberty Broadband during the pendency of the transaction.
John Malone and certain related holders have agreed to vote, subject to certain exceptions, shares beneficially owned by them, representing approximately 48% of the aggregate voting power of Liberty Broadband, in favor of the transaction.
Greg Maffei, President and Chief Executive Officer of Liberty Broadband, and certain related holders have also agreed to vote, subject to certain exceptions, shares beneficially owned by them, representing approximately 4% of the aggregate voting power of Liberty Broadband, in favor of the transaction.
Charter intends to make repurchases of Charter shares from Liberty Broadband in amounts of approximately $100 million per month, subject to certain adjustments, and as needed incremental repurchases or loans to Liberty Broadband, to allow for the timely repayment of Liberty Broadband debt in anticipation of the combination of the companies at closing.
"We are pleased to announce this agreement today with Liberty Broadband," said Chris Winfrey, President and CEO of Charter. "We look forward to their continued partnership and support in the coming years in driving value for our shareholders."
"Today's announced transaction will rationalize Liberty Broadband's trading discount and ultimately provide our shareholders with enhanced liquidity," said John Malone, Chairman of Liberty Broadband.
"We are pleased to have reached definitive terms with Charter and provide Liberty shareholders with certainty of a future transaction at an attractive exchange ratio," said Greg Maffei, President & CEO of Liberty Broadband.
Centerview Partners LLC is serving as exclusive financial advisor to the special committee of Charter. Citi is serving as exclusive financial advisor to Charter. Wachtell, Lipton, Rosen & Katz is serving as legal counsel to the special committee of Charter. J.P. Morgan is serving as exclusive financial advisor to Liberty Broadband, and O'Melveny & Myers LLP is serving as legal counsel to Liberty Broadband.
Charter Communications, Inc. (NASDAQ: CHTR) is a leading broadband connectivity company and cable operator with services available to more than 58 million homes and businesses in 41 states through its Spectrum brand.
Liberty Broadband Corporation (NASDAQ: LBRDA, LBRDK, LBRDP) operates and owns interests in a broad range of communications businesses, with its principal assets consisting of its interest in Charter Communications and its subsidiary GCI.
The transaction marks a significant development in the telecommunications and broadband industry, with the potential to reshape the competitive landscape in the sector. The market has reacted to these announcements by moving the company's shares -6.3% to a price of $90.62. For more information, read the company's full 8-K submission here.
