Key Takeaways
- Liberty Broadband shares surged Tuesday after the communications provider made a counteroffer to a merger proposal from Charter Communications.
- The counteroffer calls for Liberty Broadband investors to get 0.29 Charter shares for each Liberty share they own. Charter’s proposal was for 0.228 of a share for each share of Liberty.
- Liberty currently owns a 26% stake in Charter, which offers internet, cable television, and mobile phone services under the Spectrum brand.
Shares of billionaire cable mogul John Malone’s Liberty Broadband (LBRDK) surged Tuesday after the communications provider made a counteroffer to a merger proposal from Charter Communications (CHTR).
Liberty Broadband, the owner of Alaska cable operator GCI, holds a 26% stake in Charter, which offers internet, cable television, and mobile phone services under the Spectrum brand. The counteroffer calls for an all-stock transaction that would give Liberty investors 0.29 shares of Charter Class A stock for every share of Liberty they owned. Last week, Charter offered 0.228 of a share for each share of Liberty.
The deal also calls for Charter to assume or refinance Liberty’s debt at or prior to closing, plus its outstanding preferred stock. Liberty said it would “operate in the ordinary course of business” during the transition, and recommended a closing date of June 30, 2027 or earlier.
Liberty CEO Greg Maffei said the counteroffer would benefit both firms, and “rationalize the dual corporate structure between Charter and Liberty Broadband, providing enhanced trading liquidity and removing Liberty Broadband’s existing governance rights.”
“We are not commenting on the details of the negotiation,” a Charter spokesperson said in an emailed statement to Investopedia.
Liberty Broadband shares were up 25% at $76.37 midday Tuesday following the news, though even with Tuesday’s gains, they’ve lost over 5% in 2024 so far. Shares of Charter Communications fell 2.9% to $322.18 Tuesday, and have dropped more than 17% since the start of the year.
UPDATE—This story has been updated with a Charter comment and the latest stock prices.