Liberty Interactive Corporation, a holding company controlled by US cable tycoon John Malone, has entered into a definitive agreement to acquire Anchorage-based telecoms firm General Communication Inc (GCI) in a deal with an ‘undiluted equity value’ of USD1.12 billion. Malone is no stranger to complex deals, and this transaction will see Liberty Interactive acquire GCI through a reorganisation in which certain Liberty Ventures Group assets and liabilities will be contributed to GCI in exchange for a controlling interest in the Alaskan firm. Liberty Interactive will then effect a tax-free separation of its controlling interest in the combined company (to be named GCI Liberty) to the holders of Liberty Ventures common stock in full redemption of all outstanding shares of such stock.
Shareholders of GCI will receive total consideration of USD32.50 per share comprised of USD27.50 per share in GCI Liberty Class A common stock and USD5.00 in newly issued Series A preferred shares, based on a Liberty Ventures reference price of USD43.65. The transaction represents an undiluted enterprise value for GCI of USD2.68 billion, and an undiluted equity value of USD1.12 billion. Following the successful completion of the transaction, Liberty Interactive will hold a 77% undiluted equity interest, and a 84% undiluted voting interest in GCI Liberty.
TeleGeography notes that GCI offers mobile, fixed line, broadband and pay-TV services for residential and business consumers in Alaska. The telco’s ‘1GIG’ Gigabit broadband network went live in 2015, and is available in Anchorage, Juneau, Mat-Su and Fairbanks. GCI also claims to preside over Alaska’s largest 4G LTE network. For its part, Liberty Interactive was split off from Liberty Media in 2013. It primarily controls interests in companies that are involved in video and digital commerce industries.