John Malone’s Liberty Media Corp. (LMCA:US) is close to a deal to acquire 25 percent of Charter Communications Inc. (CHTR:US) from its private-equity investors, according to a person familiar with the situation.
The firms include Apollo Global Management LLC (APO:US) and Oaktree Capital Management LP, Charter’s largest shareholders, said the person, who asked not to be named as the process is private. The stake was worth $2.48 billion at today’s closing price.
Charter, the fourth-largest U.S. cable operator, has been taking advantage of improving cash flow to refinance debt and add customers through the acquisition of Cablevision Systems Corp. (CVC:US)’s Optimum West. Its shares have almost tripled since the end of 2009, when it emerged from bankruptcy protection with the deal that gave the private-equity firms their stakes.
The stock rose (CHTR:US) 8.8 percent to $98.04 at the close in New York, the highest closing price since the bankruptcy.
Anita Lamont, a spokeswoman for St Louis-based Charter, declined to comment. Courtnee Ulrich, a spokeswoman for Englewood, Colorado-based Liberty Media, didn’t immediately respond to an e-mail and voice mail seeking comment.
Charles Zehren, a spokesman for Apollo at Rubenstein Associates Inc., declined to comment. Andrea Williams, a spokeswoman for Oaktree, didn’t immediately respond to a voice mail seeking comment.
While Malone’s Liberty Global Inc. has 19.6 million pay-TV, Internet and phone customers, mostly in Europe, and the billionaire directly holds a 4.8 percent stake in satellite-TV company DirecTV, his U.S. cable investments have been limited since he sold Tele-Communications Inc. to AT&T Corp. in 1999. Liberty Media holds an undisclosed stake in Time Warner Cable Inc., the second-biggest U.S. cable company, according to the annual report of Malone’s company.
Dow Jones earlier reported on the deal to sell the Charter stake to Malone.
Started by Paul Allen, a Microsoft Corp. co-founder, in 1993, Charter filed for bankruptcy protection in March 2009 after becoming overwhelmed by more than $21 billion in debt. Allen’s stake dropped to 35 percent when Charter emerged with about $8 billion less debt. He has since sold almost all his remaining shares, according to regulatory filings.
Charter said earlier this month that Apollo would reduce its stake by 6.2 million shares and Oaktree would sell 3.1 million in an underwritten offering. Those transactions have already been completed, according to filings.
The company agreed this year to acquire Optimum West for $1.63 billion, gaining more than 360,000 customers in Montana, Wyoming, Colorado and Utah. Charter currently serves about 5 million customers in 25 states.
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