Liberty streamlines control via deals
Comcast sells off 40% of its stake, keeps 118 mil shares
On Wednesday, Comcast announced that it had sold off 40% of its outstanding stake in Liberty by means of a forward sale agreement with Goldman Sachs. Comcast received 217 million common shares in Liberty in September as part of the sale of its 56% stake in home shopping net QVC to Malone, but that outstanding stake was becoming an overhang on Liberty's share price since Comcast had signaled its intention to dump the stock. Comcast retains around 118 million Liberty shares.
Future dealings
Under so-called forward sale agreements, Comcast gets a tax-deferred up-front payment of $894 million and will have to deliver between 71 million and 100 million shares of Liberty common stock or its cash equivalent when the contract matures in 10 years.
Liberty immediately announced that it had repurchased some 25 million shares for an undisclosed price.
In two other transactions, Malone is selling a personal stake in TP Investments (a unit that owns positions in Sprint PCS, PriceLine.com and TruePosition) back to Liberty in exchange for 5.3 million Liberty B-class shares.
Control measure
Meanwhile, Liberty is negotiating to buy back some 96 million Liberty B stock held by the estate of former TCI founder Bob Magness. Malone has had voting rights over those shares as part of his 43% voting control of Liberty. If that estimated $1.1 billion deal is completed, Malone's voting control of Liberty would be cut by around 20% to 28%.
Analysts say this should be perceived as good news by investors who will regain more voting rights over the company.
