8-KMaterial AgreementsExhibits & Filings

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Material Agreement (Mar 19, 2013)

Filed March 19, 2013For Securities:CHTR

Summary

This 8-K filing by Charter Communications, Inc. (CHTR) on March 19, 2013, announces a significant event: the entry into a Stock Purchase Agreement and a related Stockholders Agreement with Liberty Media Corporation. Liberty Media is set to acquire a substantial stake in Charter, including over 26.8 million shares of Class A common stock and warrants. This transaction will fundamentally alter Charter's ownership and governance structure. Key implications for investors include a substantial shift in board composition, with Liberty Media gaining significant representation. The agreements also outline limitations on Liberty Media's future share ownership and impose standstill provisions, restricting certain corporate actions and solicitations. These arrangements are designed to govern the relationship between Charter and its new, large shareholder for an extended period, impacting potential future strategic moves and control dynamics.

Key Highlights

  • 1Liberty Media Corporation entering into a Stock Purchase Agreement to acquire approximately 26.86 million shares and warrants of Charter Communications, Inc. (CHTR).
  • 2Four existing board designees of the Sellers (affiliated with Apollo, Oaktree, and Crestview) are expected to resign.
  • 3Charter has agreed to appoint four Liberty Media designees to its Board of Directors, including prominent figures like John C. Malone and Gregory B. Maffei.
  • 4Liberty Media is subject to an Ownership Limitation, restricting its stake to below 35% until January 2016 and below 39.99% thereafter.
  • 5A Standstill Agreement is in place, limiting Liberty Media's ability to engage in certain solicitations, propose shareholder matters, or influence company management outside of its board representation.
  • 6The company has waived certain anti-takeover provisions under Delaware General Corporation Law Section 203 for Liberty Media and agreed not to implement a poison pill that would adversely affect Liberty Media's rights regarding the purchased interests.
  • 7The Stockholders Agreement outlines specific conditions for its termination, including mutual agreement, material breach, termination of the purchase agreement, or a specific date in January 2017.

Frequently Asked Questions

This 8-K filing announces that Liberty Media Corporation has entered into a definitive agreement to purchase a significant ownership stake in Charter Communications, Inc., including common stock and warrants. It also details the related governance and shareholder agreement that will govern the relationship between Liberty Media and Charter.

The transaction will lead to a significant change in Charter's board. Four current designees are expected to resign, and Charter has agreed to appoint four designees nominated by Liberty Media. This ensures substantial representation for Liberty Media on the board.

Liberty Media is subject to an Ownership Limitation, capping its stake at certain percentages at different times. It is also bound by Standstill provisions, which restrict its ability to solicit proxies, propose shareholder actions, or generally attempt to influence the company's management or policies outside of its board role.

Yes, Charter has agreed to waive certain anti-takeover provisions under Delaware law (Section 203) for Liberty Media and has committed not to implement a 'poison pill' or similar anti-takeover measures that would hinder Liberty Media's ability to hold or transfer its acquired stake within the agreed-upon limits.