biz.yahoo.com
Friday June 13 9:20 AM EDT
Comcast Corp. to Own Stake in PRIMESTAR Inc.
COMCAST CORP. To Retain Minoity Stake in PRIMESTAR Inc.--
Ticker: CMCSA (news)
Highlight: M&A
Date: 970613
June 11, 1997, TCI Satellite Entertainment Inc. (TSATA) said PRIMESTAR Partners L.P. agreed to
restructure into a new entity called PRIMESTAR Inc.
Separately, PRIMESTAR Partners and American Sky Broadcasting said American Sky agreed to sell
PRIMESTAR Partners two satellites that are under construction and a license to "operate a direct
broadcast satellite business at the 110 degree west longitude orbital slot using 28 transponder channels"
for $1.1 billion in non-voting convertible securities.
The consideration equals the investments for the assets by News Corp. Ltd. (NWS), which owns 80%
of American Sky, and MCI Communications Corp. (MCIC), which owns 20%, plus related interest
expenses.
American Sky also agreed to sell its Gilbert, Ariz., satellite uplink facility to Tele-Communications Inc.
(TCOM) for a consideration representing American Sky's investment in the facility and related interest
expenses.
Under the restructuring agreement, each partner in the limited partnership will contribute their partnership
interests, and customers of PRIMESTAR, a U.S. direct satellite broadcast service, to PRIMESTAR
Inc.
TSAT shareholders would receive one share of PRIMESTAR Inc. for each TSAT share. The other
partners would receive an equity interest in PRIMESTAR Inc. and cash; the consideration is subject to
closing adjustments.
PRIMESTAR Inc. will combine the PRIMESTAR Partners satellite assets from each partner, including
the operations of TSAT's Tempo Satellite Inc. unit and the two satellites owned by TSAT.
TSAT shareholders would retain an interest of about 37% in PRIMESTAR Inc., and Comcast
Communications Corp. (CMCSA) and Cox Communications Inc. (COX) would hold about 10%, and
9%, respectively. Time Warner Satellite Services and Newhouse would hold a total of about 30%;
MediaOne, a unit of U S West Media Group (UMG) about 10%; and GE Americom, a unit of General
Electric Co. (GE) about 4%, TSAT said. Time Warner Satellite is a unit of Time Warner Inc. (TWX).
The securities to be received by American Sky consist of non-voting Conv. Pfd. with a liquidation value
of about $600,000,000 that is convertible into about 52,000,000 shares of non-voting common, and
approximately $500,000,000 in Conv. Sub. Notes that are convertible into approximately 43,000,000
shares of non-voting common. The conversion rates are subject to adjustment. |
