GCI to be acquired by Colorado-based Liberty Interactive
Last updated at 7:31 p.m. on Tuesday, April 4
Alaska’s largest telecommunications company, General Communication, Inc. (GCI), signed a complex deal Tuesday morning to be acquired by Colorado-based Liberty Interactive Corp.
The deal, announced in a lengthy press release, will combine GCI’s business holdings with reorganized assets and liabilities belonging to Liberty Ventures Group. The deal will give Liberty Ventures controlling interest in GCI and create a new company — GCI Liberty.
“It’s not really a sale, it’s a merger. We’re combining our assets with certain … assets held by Liberty Interactive,” Ron Duncan, GCI co-founder, president, and chief executive officer, said in an interview Tuesday.
GCI will continue to operate as a “freestanding company” within GCI Liberty. GCI will be the largest asset owned by Liberty Ventures.
GCI’s headquarters will remain in Anchorage, and the “leadership team, brand, operations, and products and services will not change as a result of the transaction,” the release states.
GCI Liberty will also control a minority interest in the nation’s second largest cable company, Charter Communications.
The merger gives GCI access to the resources of a much larger company, as well as the ability to be competitive outside the Alaska marketplace, according to the release. It also gives Liberty Interactive significant tax breaks.
“This transaction is a win for our shareholders, customers, and employees,” Duncan said in Tuesday’s release. “As part of a larger company, GCI will be even better positioned to compete, innovate, and serve Alaskans and our customers in the lower 48 states.”
GCI’s stock price rose 62 percent following Tuesday’s news, ending the day at $33.39 a share.
Key points of the agreement for GCI shareholders include:
- GCI shareholders will receive $32.50 in GCI Liberty stock, to be divided up as $27.50 in common stock and $5 in a new preferred stock.
- The common and preferred stock of GCI Liberty will be publicly traded.
- The Series A preferred shares will accrue dividends at an initial rate of 5 percent per annum.
- Once the transaction is finalized, former GCI shareholders will own 23 percent of the undiluted equity and 16 percent of the undiluted voting power of GCI Liberty.
“Nothing from the way we do business will change, and nothing about what we offer to our customers will change that wouldn’t have changed otherwise,” said Duncan.
Duncan will continue to serve as chief operating officer of GCI and will serve on the board of directors for the newly formed GCI Liberty.
“The leaders of Liberty Interactive know us, respect how we operate, and believe that we will continue to grow value for customers and shareholders. Our culture, leadership, and focus on Alaska will continue as strong as ever,” said Duncan.
The deal is still subject to regulatory review before becoming official, but is expected to be finalized in 2018.
“It’s a natural step in our evolution,” Duncan said of the merger. “We need to diversify beyond Alaska. We need to spread out what we’re doing. GCI looks very very different than it did 40 years ago. It looks very different than it did 5 years ago.”
GCI is the parent company of KTVA.
Jason Sear and Megan Mazurek contributed reporting.
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