Time Warner Cable Files $5.5B IPO
By John M. Higgins -- Broadcasting & Cable, 10/18/2006 3:50:00 PM
Countering the trend of cable companies going private, Time Warner Cable Wednesday filed to allow its stock to begin trading publicly. The move is part of the company's acquisition of most of Adelphia Communications operations out of bankruptcy court and breakup of a partnership with fellow cable operator Comcast Corp.
Time Warner Cable and Comcast paid $17.2 billion in cash and stock in the Adelphia deal.
The registration is not a standard initial public offering because Time Warner Cable is not looking to raise cash in the deal. Instead, it will allow Adelphia to sell the $5.5 billion worth of Time Warner Cable shares it received in the system deal and distribute the cash to its creditors. After the deal is complete, Time Warner Inc. will still own 84% of the cable division, while outsiders will own just 16%.Time Warner will own all of a small number of powerful Class B shares, that will allow the company to control Time Warner Cable's board –electing eight of 10 directors -- even if it sells its larger Class A shares.
Time Warner Cable values the company's shares at $35.25 per share. The deal implies that the company's systems are worth $3,629 for each of their 13.5 million basic cable subscribers.
TWC's filing disclosed for the first time the compensation deals of the division's top executives. President and CEO Glenn Britt was paid $4.6 million last year and COO Landel Hobbs received $2.5 million.
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