Charter: Paul Allen Mulls Alternatives, Again

Just wanted to give you a modest warning about how you interpret Wednesday’s amended 13-D filing on Charter Communications (CHTR) by Paul Allen, the company’s controlling shareholder. The filing states, as correctly reported by the Wall Street Journal, as well as the Associated Press, that Allen could take the company private.

An excerpt from the filing:

Mr. Allen…may…pursue or propose recapitalization or other possible restructuring transactions designed to reduce the Issuer’s leverage (which could include, without limitation, exchanges designed to reduce the Issuer’s leverage including debt to equity exchanges), going private transactions resulting in Mr. Allen acquiring beneficial ownership of all or substantially all of the common stock of the Issuer or other extraordinary corporate transactions, such as mergers or reorganization or sales of material assets.

Very interesting, right?

But here’s the thing: his filings have been saying basically the same thing for years. This is the ninth amendment of his 13-D filing. The sixth amendment of the filing, filed in August 2002, also said that Allen might take the company private. An excerpt:

Mr. Allen is further considering possible restructuring transactions designed to reduce the Issuer’s leverage. Such transactions could include, without limitation, the possibility of proposing a debt to equity exchange pursuant to which Mr. Allen and/or others would exchange debt of the Issuer or its subsidiaries for common stock of the Issuer or equity of Charter Communications Holdings Company. Alternatively, Mr. Allen could propose a going private transaction in the future that would result in Mr. Allen acquiring beneficial ownership of all or substantially all of the common stock of the Issuer.

So is there anything really new here? The wording is a bit different, but the substance would appear to be unchanged.

Comments

[observer8086:]

Paul Allen has tried and tried again to do something with Charter. It's about time to give up. The company has not improved meaningfully operationally, and the debt markets probably won't let it refinance its huge debt burden so easily the next time. Easy credit masked the fact that Allen, once again, hired someone who basically doesn't know what he's doing, Lance Conn. It's been years since Conn took over, and the only thing he's demonstrated is that 1) he knows how to negotiate an incentive package for himself and Vulcan and 2) he is wholly unqualified to advise on cable and restructuring. Look at the stock price.

Why Allen would hire Conn, who has no background in cable, marketing or finance to effectively decides who runs Charter (and manage his investments, another bizarre choice) is a mystery. It's time to bail out, Paul, of both Charter and Lance Conn.

2007 Aug 21 07:28 AM