8-KLeadership ChangesAcquisitions & DispositionsMaterial Agreements+4

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Material Agreement (May 19, 2016)

Filed May 19, 2016For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) filed this Form 8-K on May 19, 2016, to report the completion of significant transactions that fundamentally reshaped the company. The most critical event is the consummation of a series of mergers, combining Charter Communications (Legacy Charter) and Time Warner Cable (TWC) under a new parent entity, also named Charter Communications, Inc. This effectively makes TWC a wholly-owned subsidiary of the newly formed public company. In addition to the TWC merger, Charter also completed its acquisition of Bright House Networks from Advance/Newhouse Partnership (A/N). This transaction, alongside the TWC merger, creates a significantly larger cable operator. The filing details the exchange ratios for TWC and Legacy Charter stockholders, the issuance of new shares, and the roles of key stakeholders like A/N and Liberty Broadband in the new corporate structure. Investors should note the creation of a new public parent company and the substantial consolidation within the cable industry.

Key Highlights

  • 1Completion of a series of mergers combining Charter Communications (Legacy Charter) and Time Warner Cable (TWC) under a new parent entity, Charter Communications, Inc. (New Charter).
  • 2Simultaneous acquisition of Bright House Networks by New Charter from Advance/Newhouse Partnership (A/N).
  • 3New Charter is now the public company parent, trading under the ticker CHTR, succeeding Legacy Charter.
  • 4Details provided on the exchange ratios and consideration (cash and stock) for TWC and Legacy Charter shareholders.
  • 5Advance/Newhouse Partnership (A/N) received significant cash and equity interests (common and convertible preferred units) in Charter Holdings, the operating subsidiary.
  • 6Liberty Broadband made substantial investments, receiving shares of New Charter Class A Common Stock, and has registration rights for these shares.
  • 7Leadership structure of the new Charter Communications, Inc. board and executive team is outlined, including appointments and agreements for key personnel like Thomas M. Rutledge.

Frequently Asked Questions

The primary event is the completion of a series of mergers that combined Charter Communications (Legacy Charter) and Time Warner Cable (TWC) under a new parent company, also named Charter Communications, Inc. Additionally, Charter completed its acquisition of Bright House Networks.

Following the mergers, TWC shareholders received either a combination of cash and New Charter Class A Common Stock, or solely cash, depending on their election. Legacy Charter shareholders received New Charter Class A Common Stock based on an exchange ratio. The new parent company, Charter Communications, Inc., is now the publicly traded entity under the CHTR ticker.

A/N, the former parent of Bright House Networks, received approximately $2.021 billion in cash and significant equity interests in Charter Holdings (New Charter's primary operating subsidiary), including exchangeable common units and convertible preferred units. They also received one share of New Charter's Class B Common Stock, granting them specific voting rights tied to their economic interest.

Liberty Broadband made significant investments in New Charter, acquiring a substantial number of Class A Common Stock shares. They also entered into a Registration Rights Agreement, allowing them to request the registration of their shares for resale under certain conditions.