Charter To Buy Falcon Cable TV
May 26, 1999 10:00 AM ET
Charter Communications Inc., the cable company owned by billionaire Paul Allen, plans to acquire Falcon Cable TV for about $2 billion in cash and $1.6 billion in debt, the Wall Street Journal reported Wednesday.
The deal between the two privately held companies is expected to be announced as early as Wednesday would bring about one million subscribers to Charter's existing base 3.9 million, bringing Allen close to having 5 million customers, the newspaper said.
As of Tuesday night, Charter and Falcon were still hammering out a definitive agreement, making it possible that the deal could fail to materialise, the Journal reported. Falcon is 54 percent owned by the Nathanson family and 46 percent owned AT&T Corp. <T.N>
Allen, who co-founded Microsoft Corp. <MSFT.O> with Bill Gates, is expected to pay about $3,600 for each of Falcon's one million subscribers. Through St. Louis-based Charter, the Los Angeles-based Falcon will win a rich partner with strong ties to the Internet and cable world.
The deal for Charter would also help further Allen's ambitions to created a "wired world" that would bring together high-speed access with advanced interactive services. To finance his vision, Allen is considering taking Charter public, the newspaper said.
The Falcon deal is the latest in a series of high-stakes cable mergers and acquisitions that have reshaped the industry's competitive landscape.
AT&T got the merger ball rolling in June 1998 by announcing its intent to buy cable giant Tele-Communications Inc. for $48 billion in cash and stock.
A string of smaller deals ranging in value from $3 billion to $5 billion followed the blockbuster AT&T deal. AT&T again recently stunned Wall Street when it made a $54-billion cash and stock offer for MediaOne <UMG.N>, outbidding Comcast Corp. <CMCSA.O>.
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