Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, August 9, 1994 TAG: 9408100018
SECTION: BUSINESS PAGE: C7 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: LENGTH: Medium
Until 1984, TeleCable was a division of Landmark Communications Inc. of Norfolk, which owns the Roanoke Times & World-News. Frank Batten Sr., chairman of TeleCable, also is chairman of Landmark. TeleCable and Landmark both are based in Norfolk, and both are privately owned.
Under the terms of the merger agreement, TeleCable's shareholders will receive 41,666,667 shares of TCI Class A common stock plus TCI convertible preferred stock with a liquidation value of $300 million and paying a dividend of 5.5 percent.
TCI's Class A common stock was valued at $22.75, down 31 cents at the close of trading Monday. For the purpose of the merger, the stock was valued late last week, making the deal worth about $1.26 billion to TeleCable shareholders.
The preferred stock can be converted at the option of its holders into 10 million shares of TCI Class A common stock. The common stock will be redeemable by TCI after five years.
TeleCable operates in 21 locations in 15 states, with about 740,000 customers. It generates annual revenues of about $300 million, the company said. The Wytheville system is the only TeleCable system in Virginia and is the company's smallest. TCI had revenues in 1993 of $4.15 billion with 10.7 million customers.
TeleCable needed to establish an alliance with a larger company to ensure that its customers and employees would benefit fully from the growth in broad-band communications, which involves a growing overlap of video and telephone services, said Richard Roberts, TeleCable's chief executive officer.
The merger should strengthen both companies, Batten said. TCI's systems and programming assets are well-positioned for the coming revolution in telecommunications, and TCI's management is "exceptionally creative and entrepreneurial," Batten said.
John Malone, president and chief executive of TCI, said the "combination will further our strategy of deploying high-speed, digital broad-band communications systems throughout the communities we serve and add to our significant presence in such major markets as Dallas, Kansas City, southern Florida and Greenville/Spartanburg."
The merger will require approval of TeleCable's shareholders and government regulators.
Merger plans between TCI and Bell Atlantic were discussed and abandoned earlier this year. Last week, a $2.3 billion purchase offer from TCI and Comcast, another cable operator, was accepted by QVC, the home shopping network.
TCI's Class A and Class B common stock and its Class B preferred stock is traded on the NASDAQ national market under the symbols TCOMA, TCOMB and TCOMP.
by CNB