John Malone M&A Cleanup Costs Minority Investors

Summary

• Charter Communications announced that it had reached a deal to acquire Liberty Broadband. Liberty Broadband investors are set to receive 0.236 Charter shares for each of their shares, while also receiving spun-out subsidiary GCI.
• The agreed offer, based on Charter’s closing price on Tuesday, and adding in about $2.5 billion in net debt assumed by the buyer, is worth 11%, or roughly $2 billion, less than the stock locked up at Liberty.
• The alternative of voting down the deal may be a return to where the stock was trading in early September, or about a third below the accepted offer.

courtneyk/E+ via Getty Images

By Breakingviews

If you sup’ with the devil, you should have a long spoon. Investors in Liberty Broadband (LBRDK, LBRDA) have re-learned the old adage, after it struck a roughly $13 billion