8-KLeadership ChangesMaterial AgreementsExhibits & Filings

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Material Agreement (Apr 1, 2015)

Filed April 1, 2015For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) announced a significant definitive agreement on March 31, 2015, to acquire Bright House Networks, LLC (BHN) from Advance/Newhouse Partnership (A/N). This transaction, structured as a contribution, involves Charter Holdco acquiring BHN's assets and business for approximately $2.0 billion in cash and $2.5 billion in convertible preferred units, plus common units. Concurrently, A/N will receive cash, Charter Holdco membership interests, and newly issued Class B common stock in New Charter, which will become the parent company post-Comcast transaction. This acquisition is a major step for Charter, expanding its operational footprint and subscriber base. The agreement is contingent on the completion of Charter's previously announced transactions with Comcast, regulatory approvals, and shareholder consent. The filing also details an amended and restated Stockholders Agreement with Liberty Broadband Corporation and A/N, outlining governance rights, board representation, and share ownership limitations for these key stakeholders in the new Charter structure. This agreement solidifies relationships and governance frameworks for the combined entity.

Key Highlights

  • 1Charter Communications entered into a definitive Contribution Agreement to acquire Bright House Networks (BHN) from Advance/Newhouse Partnership (A/N).
  • 2The acquisition involves a cash payment of approximately $2.0 billion and $2.5 billion in convertible preferred units, alongside common units of Charter Holdco.
  • 3A/N will receive cash, Charter Holdco membership interests, and new Class B common stock in New Charter, granting voting rights.
  • 4The transaction is subject to the completion of Charter's Comcast merger, regulatory approvals, and shareholder consent.
  • 5An amended and restated Stockholders Agreement was entered into with Liberty Broadband and A/N, defining future governance and stakeholder rights.
  • 6Liberty Broadband committed to purchasing $700 million of Charter Class A Common Stock and may increase its stake to 19.01%.
  • 7The Stockholders Agreement outlines board composition, director designations for A/N and Liberty, and certain voting and acquisition limitations.

Frequently Asked Questions

This 8-K filing announces Charter Communications' entry into a definitive agreement to acquire Bright House Networks (BHN) from Advance/Newhouse Partnership (A/N). It also details a new Stockholders Agreement with A/N and Liberty Broadband Corporation, which governs the structure and governance of the combined entity, especially in light of the pending Comcast transaction.

Charter's subsidiary, Charter Holdco, will acquire BHN's assets for approximately $2.0 billion in cash and $2.5 billion in convertible preferred units. Additionally, BHN will receive approximately 33.4 million common units of Charter Holdco, priced at a reference price of $172.9963 per share. Advance/Newhouse Partnership will also receive shares of New Charter's Class B common stock.

The acquisition is contingent upon several key conditions, including the completion of Charter's previously announced transactions with Comcast Corporation, obtaining necessary regulatory approvals, approval of certain transaction-related matters by Charter's stockholders, and fulfillment of other customary closing conditions. Additionally, A/N has a 'right of first offer' obligation with Time Warner Cable regarding the contributed assets, which must be completed.

The Stockholders Agreement sets a fixed board size of thirteen directors. Upon closing, A/N and Liberty will each have designees on the board. It also outlines provisions for nominating directors, committee appointments, limitations on share acquisitions, voting caps, and preemptive rights for A/N and Liberty to maintain their respective ownership percentages. Liberty has also committed to a significant investment in Charter's Class A Common Stock.