In a interesting deal it has just been announced that Charter Communications (CHTR) will acquire Liberty Broadband (LBRDA). The deal will not include the GCI Communications business which is an operating division of Liberty Broadband.
Liberty Broadband is a huge shareholder in Charter–and in fact with the exception of the small GCI business in Alaska Liberty is simply composed of their Charter holdings.
Liberty has a 7% preferred outstanding (LBRDP) that is to be redeemed in 2039–I have not checked on the status of these shares. Originally issued when Liberty acquired GCI we will have to see what happens to these shares. I have not read the filings on this deal yet.
Well I just bought enough to round my position to 500 shares. LBRDP is now a pretty safe 7.35% yield. Set it and forget it as long as this deal goes through. I am not sure if it would be rated IG but when it comes to the communications sector I feel pretty good about Charter compared to a US Cell/TDS like entity.
I wonder if Charter issued a preferred what rate would they get? I would like to think better then 7.35%….
I like US Mobile right now. I would think the regulatory environments for a merger with Tmobile improved with the changes in Washington
While I do own some GJH (dumpster diving at lows) and TDS-V (token 100ish shares for tracking i never followed through on) I have never really committed to those positions. When discussing cellular providers I feel it is harder for them to merge. I think the latest news was USM selling off a lot of spectrum to ATT for a billion plus dollars. I would not be a betting man that the govt allows USM to be sold to TMobile no matter who is in govt. I feel like USM is also hedging their bets by selling off spectrum to pay off debt I would imagine.
Deal was designed to pass regulatory. If regulatory wasn’t a concern T-Mobile would have bought it all.
I will follow the money and the market. USM stock is still $62+ per share. USM was in the 40s when the merger was announced.
good comment.. lbrdp/pff pair has traded in a well defined range for the past year.. currently trading about 1/2 sigma rich.. high for the year was 3 sigma rich on 6.14 and low was 2 sigma cheap on 2/13
LBRDP seems to be holding up just fine. Up about a dime so far today.
I have owned for years and I guess I will just continue to hold it.
From Charter’s Investor relations website
Each holder of Liberty Broadband Series A cumulative redeemable preferred stock (“Liberty Broadband preferred stock”) will receive one share of newly issued Charter cumulative redeemable preferred stock (“Charter preferred stock”) per share of Liberty Broadband preferred stock held, which Charter preferred stock will substantially mirror the current terms of the Liberty Broadband preferred stock.
https://corporate.charter.com/newsroom/november-13-2024/charter-to-acquire-liberty-broadband-corporation
For what it’s worth, the Seeking Alpha news story says, “Liberty’s preferred equity of $180M will become Charter preferred equity at the close of the transaction.”
Substantially safer with Charters cash flows.
Less risky company but the acquiring companies don’t always want the preferred stocks There have been delistings and an occasional default by those that weren’t struggling. Probably not a factor here but suspicion abounds with acquisitions these days.
the one thing i just saw is it’s not expected to close till 2027.
so, i am assuming the preferred will be hanging around until then
From the FT article: Each holder of Liberty Broadband Series A cumulative redeemable preferred stock (“Liberty Broadband preferred stock”) will receive one share of newly issued Charter cumulative redeemable preferred stock (“Charter preferred stock”) per share of Liberty Broadband preferred stock held, which Charter preferred stock will substantially mirror the current terms of the Liberty Broadband preferred stock.
can anyone advise me the terms of LRBDP?
lt,
Do you mean the prospectus? I have always thought of it as your typical fixed rate perpetual with no change of control protections. Sorry if I am misunderstanding.
https://www.libertybroadband.com/investors/news-events/press-releases/detail/34/liberty-broadband-and-gci-liberty-announce-proposed
https://www.sec.gov/Archives/edgar/data/808461/000110465918015741/a18-7767_2ex3d1.htm
https://www.sec.gov/Archives/edgar/data/1611983/000104746920005363/a2242591z424b3.htm
https://www.libertybroadband.com/investors/financial-information/sec-filings-liberty-broadband/content/0001047469-18-002023/a2234950zdefm14a.htm
fc–it is a mandatory redemption (term preferred essentially) with a redemption in 2039.
Tim,
I read that in your post but I never could find a document to back it up until just a moment ago when I replied to lt. I really do not know how I missed that piece of info all this time… Thank you for the clarification making me find it in one of the docs above. Quantum really does not have much on it and their link to the prospectus does not either.
““Scheduled Redemption Date” shall mean the first (1st) Business Day following March 8, 2039.”
Hi fc–right here on this website.
https://innovativeincomeinvestor.com/security/liberty-broadband-series-a-cumulative-redeemable-preferred-stock/
Which will be Wed 3/9/39 — like they couldn’t determine that?