Charter Communications' multi-billionaire Chairman Paul Allen sent up a
flare, acknowledging that he's considering taking the company private or
restructuring its debt.
In an Securities and Exchange Commission filing, the Microsoft co-founder
confirmed reports that first appeared in Broadcasting & Cable in June
that he was studying a Charter bailout.
With Charter's price sinking to $2.50 a share, Allen could buy the 46 percent
of Charter he doesn't already own for a mere $750 million at today's prices.
If he truly continues to have confidence in cable -- his $7.6 billion Charter
investment has crumbled to less than $1 billion -- that would let him reap all
the upside in value.
A more complicated and intriguing option
would be to buy several classes of Charter's $9.3 billion in outstanding bonds,
some of which are trading at 50 cents on the dollar.
If he bought up bonds at a discount in the open market and offered to convert
them into equity, the immediate public value of Charter would likely shoot up
and Charter's balance sheet could be far healthier.
Industry executives said that Allen is planning to buy both bonds and stock,
but were not sure whether he planned to go as far as taking Charter