Charter Says Paul Allen Gets “Inquiries” On Possible Deals
Charter Communications (CHTR) disclosed in an 8-K filing today that controlling investor Paul Allen “has received informal inquiries from various parties regarding potential investments or transactions involving the company.” Charter said it has provided certain material non-public information to those parties under non-disclosure agreements.
Wow, that’s fascinating. Charter, after all is a hugely leveraged cable company, with roughly $20 billion in debt and a market cap of just $366 million. In fact, the company today announced plans to issue $500 million of second lien notes due 2014 to pay down debt under its revolving credit facility. It also plans to borrow another $275 million in term loans under its existing credit facilities. Those funds will also be used to reduce borrowings under the revolving portion of its credit facilities.
Also today, the company announced that CFO Jeffrey Fisher will resign as CFO effective April 4; he will be replaced on an interim basis by Eloise Schmitz, the company’s senior VP for strategic planning.
In previous SEC filings, Paul Allen has said he may consider various kinds of transactions involving Charter, including taking it private, or selling assets.
One possibility that the Street has talked about in the past would be the sale of Charter’s systems in Los Angeles or Dallas/Ft. Worth to Comcast (CMCSA) or Time Warner Cable (TWC).
Today, investors seemed more focused on the new borrowings and the CFO’s departure. Charter is down 1.5 cents, or 1.6%, at 92.5 cents.
Who is buying these bonds? Seriously, who has that much need for a tax writeoff?
Chtr has been prenounced dead more times then I can count. CHTR won’t die, nor will its bonds unless Paul Allen wants it to.
We will wait until Charter is officially bankrupt and then maybe we will consider buying the assets from a judge who will allow us to buy the assets for the lowest cost relative to the assets worth. Paul Allen is desperate to make it seem that things are in play because so much of his peronal fortune is connected to Charter that its’ failure will surely wipe out a good percentage of his personal wealth.
Sorry to hear Allen is losing wealth, unfortunatly, he’s taken me down that road too.
Good news on the promotion of Eloise Schmitz to CFO, the REAL financial wizzard of that company. This will spur some positive chatter.
Paul Allen will not allow this company to go under. It is a huge and valuable asset with some great systems
Get ready for a massive overhaul of Charter management and further staff reductions - Charter’s well-practiced superficial response to its fundamental problems. (Of course exiting senior management will still get hefty severence packages and bonuses.)
IBOUGHT 100 SHARES @20,SAME AGE AS ALLEN ONLY NOW I AM UNEPLOYED DISABLED AND NO MED INS.WOULD LIKE PAUL ALLEN TO THINK ABOUT THE SHARE HOLDERS OF CHARTER WHO HAD FAITH IN HIM
What a dissapointment.
Such a success with Bill Gates and look what’s happened now. Why don’t you get your old friend to help you out so that we can also recapture SOME of the losses we’ve incurred.
Tech Trader Daily is a blog on technology investing written from Palo Alto, California by long-time Barron's West Coast Editor Eric J. Savitz. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields.
