<<BTW, if AT&T and Liberty are not happy in bed, I would fear that AT&T
could decide not to use ACTV's technology.>>>
NOT !
"AT&T is now going to be General Instrument's largest customer, and this....... "
"while owned by AT&T, is managed by former
Tele-Communications Inc. chairman John Malone. Liberty is a separate
stock and invests primarily in programming,"
" Liberty is a separate
stock "
SO , THERFORE....
"Liberty acts as a stand-alone entity"
with Malone in charge, Notwithstanding the fact that LMG.A is owned by T.
Even if "T" & Liberty separated (or gave the appearance of a separation) it would only be done to pacify the regulators, and I am sure that these guys would structure such a complex deal with underlying arrangements between the two companies that would still permit each company to conduct business strategies in such a way that would allow for the mutual interest and the growth and development of both companies bottom lines,
In other words, even if these companies separated from a technical standpoint, they are so symbiotic it would not matter.
PS, In case you forgot, General instrument "ACTV INSIDE"
April 1999,
---------------------------
Shareholder picture changing at General Instrument
Liberty Medica , a unit of AT&T, will pay $280 million for a larger
stake in the Horsham cable-box manufacturer.
By Patricia Horn
INQUIRER STAFF WRITER
Liberty Media Corp., the cable television investing group AT&T now owns,
will increase its stake in General Instrument Corp. of Horsham to 18
percent.
Liberty Media said yesterday it would purchase 10 million shares of
General Instrument for $280 million from the New York investment company
Forstmann Little & Co.
That move would make Liberty the largest shareholder of General
Instrument - the country's No. 1 manufacturer of cable TV set-top boxes,
the devices that decode cable programming signals.
Liberty's large stake in General Instrument comes as cable companies are
increasingly seen as future competitors to phone companies such as Bell
Atlantic.
The set-top boxes, once a one-way analog device, are part of that cable
evolution, morphing into digital devices more computer than video
decoder. Coming generations of boxes will provide not only video
programming, but high-speed Internet access, interactive video, and
telephone service.
At the same time, devices such as computers and TVs are threatening
set-top boxes by starting to incorporate some of the boxes' functions.
AT&T bought cable giant Tele-Communications Inc. this year so it could
provide local telephone service over cable networks. So the phone giant
has a huge stake in the cable industry making a successful and quick
transition into providing local phone and Internet services. It is
looking to General Instrument to provide it with some of the necessary
technologies.
"AT&T is now going to be General Instrument's largest customer, and this
is a way of solidifying the relationship and ensuring that AT&T has the
products it wants in a timely fashion," said Lawrence M. Harris, a
telecommunications equipment analyst for Josephthal & Co.
Liberty Media became a unit of AT&T when the long-distance company
bought TCI. Liberty, while owned by AT&T, is managed by former
Tele-Communications Inc. chairman John Malone. Liberty is a separate
stock and invests primarily in programming, such as USA Networks, QVC
and Discovery.
TCI traditionally had a close relationship with General Instrument,
buying many of its set-top boxes from the Horsham company, Harris said.
That is unlike cable companies Comcast Corp. and MediaOne, which have
traditionally spread their orders among a number of companies.
"We were able to increase our position at an attractive price,"
Liberty's vice president of investor relations, Vivian Carr, said about
increased investment in General Instrument. "We make strategic
investments with companies who are leaders in their industries."
"We see Liberty Media's investments as a strong endorsement of broadband
technology and GI's leadership in its development," said Edward D.
Breen, General Instrument chief executive officer.
General Instrument itself agreed to purchase 5.3 million shares from
Forstmann yesterday for $148.4 million. And, according to General
Instrument, Goldman Sachs & Co. also sold 4 million to 5 million shares
for Forstmann yesterday to institutional investors.
The sales by Forstmann will reduce its stake in General Instrument to
approximately 1 percent.
Forstmann Little acquired General Instrument in a leveraged buyout in
1990 and has owned it through some of General Instrument's and the cable
industry's most difficult times.
In 1992, it took the company public, then sold some of its shares in
1993 and 1995. Forstmann had intended to sell most of its remaining
shares last fall, but after the stock market dipped, it pulled the
offering back.
Forstmann said it will have turned a $180 million initial investment
into $1.6 billion, counting the transaction announced yesterday. A
spokesman said the company was selling because it traditionally holds
investments for only three to five years and it was now time to give its
investors their money back.
In connection with the stock sale, Theodore J. Forstmann, who has served
as a director of General Instrument since 1990, has resigned from the
company's board of directors. |
