re Liberty Media/Paul Allen/Mark Cuban considering taking Charter Communications private...
[net2phone responded to an RFP from Charter re doing cable telephony for locations 9-25 in size; Charter acknowledged ntop was being considered; Liberty Media and IDT Corporation own interests in Net2Phone]
[blog source – “Going private is good?
Apart from Cox Communications, Echostar and Charter Communications are also looking to go private, reports the New York Times. Which is not such a bad idea if the stock markets are not giving you any love. According to the times, Paul Allen is contemplating teaming up with John Malone of Liberty Media and Mark Cuban of Blogmaverick fame to take Charter private.” -- (Mark Cuban bio nba.com]
nytimes.com
Kissing the Public Goodbye
By ANDREW ROSS SORKIN
Published: August 8, 2004
WHO doesn't want a bit of privacy?
The family that controls Cox Communications announced plans last week to take the publicly held cable company private and, as is the way of corporate America and Wall Street, now lots of others are toying with the same concept.
Paul Allen, the billionaire who controls Charter Communications, the beaten-down cable operator, has been kicking around the idea of taking Charter off the public market, according to executives close to the company.
Speculation swept trading floors last week that Mr. Allen was talking about teaming up with Mark Cuban, the billionaire who made his fortune by selling Broadcast.com to Yahoo. Another big name, John C. Malone of Liberty Media, has also expressed interest in teaming up with Mr. Allen for such a deal, the executives said.
EchoStar Communications, the nation's No. 2 satellite television operator, was also singled out last week as a public-to-private prospect. At least two major investment banks spent the week putting together presentations - "pitch books" in banker parlance - for Charles Ergan, who controls EchoStar, according to media industry bankers.
What's so hot about saying hasta la vista to ticker symbols?
Cox and others contemplating such a move seem to be fed up with all those pesky shareholders, quarterly earnings targets and second-guessing research analysts. With stocks generally down - and cable industry stocks down a lot - some controlling shareholders have decided it may be best to go private so they can milk their cash cows and work out kinks in the business by themselves rather than on CNBC.
James C. Kennedy, chairman and chief executive of Cox Enterprises, which is controlled by Barbara Cox Anthony and Anne Cox Chambers, said as much in his proposal to the board of Cox Communications.
"The competitive demands of the cable industry when balanced against the need for a public company to be vigilant with respect to short-term results have convinced us that private ownership of this business is desirable and will assist C.C.I. in attaining its business objectives," he wrote.
That a company like Cox would go private simply because of the annoyance of being a public company is not the whole story, though.
INDEED, Wall Street prognosticators who had speculated that public companies - especially small and midsize companies - would go private because of the enormous expense and aggravation of having to comply with Sarbanes-Oxley regulations have been proved wrong so far.
According to Thomson First Call, in the first year after the legislation was approved, 99 companies were taken private. In the second year, the number was only 59.
The real reason Cox and others are weighing going private is the money they expect to make. With most of the costly network upgrades complete at Cox Communications, Mrs. Anthony and Mrs. Chambers can just sit back and collect cash.
And at $32 a share - which is about $3,950 per subscriber - the cost of taking the company private, if approved by a special independent committee of the Cox Communications board, would be cheap relative to historical valuations.
"We believe that the price is well below what the overall assets would fetch in the private market," Jeff Wlodarczak, an analyst at Wachovia Securities Inc., wrote in a research note to clients.
By comparison, Comcast paid about $4,500 a subscriber for AT&T's cable business in 2002. At the peak of the market in 1999, AT&T paid a whopping $6,000 a subscriber for MediaOne. And the Cox family has done the going-private thing before: in 1985, it bought back Cox Broadcasting from shareholders.
For now, all these me-too companies considering going private are likely to hold off as they wait to see how Cox fares.
Besides, tipping their hand would only push shareholders to seek more. Cox's shareholders have already bid the stock above the proposed $32-a-share price in the expectation of an even better offer from the family.
If Cox pulls off a deal, others will likely try to buy some peace and quiet, too. |
