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   Technology StocksAssociated Group / Teligent

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To: biffpincus who wrote (62)6/1/1999 4:07:00 PM
From: zebraspot
   of 76
Seems like we got sold a bit of a bill o' goods by the analysts, etc. that told us this co. was worth $80 plus. (Or, are the Berkman's selling too cheap? --- doubtful). Glad I own the B's, anyway.

I'm holding on to get at least $65 for it. These new arb situations usually swing up and down ~5% in the first week or so.

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To: zebraspot who wrote (63)6/2/1999 2:11:00 AM
From: biffpincus
   of 76
<<I'm holding on to get at least $65 for it. These new arb situations usually swing up and down ~5% in the first week or so.

It was kind of interesting how no one could figure out the price paid and the premium offered (which was next to nothing in the B's and nothing at all in the A's) ... just subtracting the market cap of Associated from the Liberty Media offer could (and did) make some easy money for the quick fingered investor in the early trading this morning ... was a crazy day to risk buying anything today though ... we just as easily could have ended 500 points down today based on news and technical fundamentals ... apparently the Berkmans see no profitable future in Trueposition (which is surprising and telling) ... I will be very interested to get feedback and analysis of this deal from folks in the know ... but basically, this deal was not that impressive and thus, not profitable to investors, and I was surprised by it ... biff

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To: biffpincus who wrote (64)6/2/1999 2:18:00 PM
From: Don S.Boller
   of 76
biff: Guess the Berkmans' hook was avoiding taxes...think
they sold too cheaply...therefore I bailed out today.
Best to all.

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To: Don S.Boller who wrote (65)6/2/1999 7:52:00 PM
From: biffpincus
   of 76
Found an indepth explanation of this stock deal in today's New York Times, and why Associated Group didn't go for the premium that everyone assumed this company deserved ....

Can you say 800 million dollars capital gains break?

The financial wheeling-dealings going on in this takeover require a finance degree (advanced) to understand (at least for me) .... but it is an interesting story of John Malone, CEO of TCI, at work ....


p.s. Am still not sure of the tax break Associated insiders are going to get and if it translates into dollars for its individual investors ...


New York Times
June 2, 1999

Liberty Media Agrees to Acquire Associated Group

Liberty Media Group, the television programming operation controlled by John C. Malone, expanded into the wireless communications business Tuesday by agreeing to acquire Associated Group Inc. in a deal worth perhaps $2.8 billion in stock.

Associated, based in Pittsburgh, is the largest investor in Teligent Inc., which provides telephone and data communications services to companies using advanced wireless technology. Associated owns about 41 percent of Teligent, which is run by Alex J. Mandl, a former president and chief operating officer of the AT&T Corporation.

Associated also owns Trueposition Inc., a small company that is developing technology to allow wireless telephone companies to locate callers, part of a Mexican cellular carrier and a handful of radio stations.

Liberty used to be part of Tele-Communications Inc., one of the nation's biggest cable-television companies. Since AT&T completed its acquisition of TCI earlier this year, Liberty has traded as an AT&T tracking stock. But AT&T has no stake in Liberty, which remains under the control of Malone, TCI's former chairman.

Malone is known for his financial wizardry, and the Associated deal is typically Malonian in its financial complexity, not least because Associated already owned big parts of both Liberty and AT&T.

At the same time, the Berkman family, which essentially controls Associated, is trying to use the deal to minimize the substantial tax bill the company could face were it to simply sell its assets piecemeal.

Twenty years ago, Associated sold a cable-television system in the Ohio Valley region of Pennsylvania to TCI for about $6.5 million in TCI stock. That stake is now worth about $2 billion in Liberty and AT&T stock. TCI's shareholders received both Liberty and AT&T shares in the AT&T-TCI merger.

Because of the phenomenal rise in the value of Associated's stake in TCI, a simple sale of those shares would generate capital gains taxes of as much as $800 million.

Malone, who is now one of the biggest holders of AT&T stock and sits on AT&T's board, stepped up to help Associated with its problem and won the cooperation of AT&T.

Malone could use AT&T's help because he did not appear to particularly want to invest in AT&T. The entire idea behind the Liberty tracking stock is to allow investors to invest in a company distinct from the core AT&T. But were Liberty to acquire Associated outright, that would entail issuing additional Liberty shares to buy a company that included about 19.7 million shares of AT&T, worth about $1.1 billion.

So AT&T agreed to put up exactly as many shares as Associated already owned -- 19,719,274 -- while Liberty contributed about 25.9 million shares of its own stock. For AT&T, the deal was a wash because it intends to retire the 19.7 million shares it will get from Liberty; the total number of AT&T's outstanding shares will stay the same.

But even Liberty's 25.9-million- share contribution was not a straight stock-for-assets swap. In addition to its AT&T shares, Associated already owned about 14.4 million shares of Liberty.

So, based on Liberty's closing price Friday of $66.4375, the value of stock that Associated's shareholders are set to receive in excess of what their company already owned in AT&T and Liberty is only about $770 million. Liberty has also agreed to assume up to $187 million in Associated debt, so the Teligent stake, Trueposition and Associated's other investments garnered only about $957 million.

That is a bargain for Liberty and Malone. Based on Teligent's closing price on Friday of $49.125, Associated's 41 percent stake in Teligent alone was worth $1.05 billion.

But Malone got the bargain because he helped the Berkmans achieve their main goal of reducing the potential $800 million tax bill while getting a good price for their assets. That process was made relatively painless for Associated because AT&T and Liberty may retire the Associated-owned shares, to which large capital gains apply, without paying any capital gains taxes. If an unrelated company, say MCI Worldcom, were to acquire Associated and then sell the AT&T and Liberty shares, MCI Worldcom would have to pay the taxes.

The implied value of the avoided taxes was seen yesterday in the rise of Teligent's shares, which rose $5.4375, to $54.5625, in Nasdaq trading.

"Having Liberty as an important investor brings a partner to the table who will add to the idea flow, add to the opportunities," Mandl said yesterday. "It will give us a chance to move Teligent even faster and further than we have before."

Executives close to the deal said that Malone could give Teligent more financial flexibility than it had enjoyed with Associated. The Berkmans, led by Myles P. Berkman, Associated's chairman, had appeared wary of diluting their stake in Teligent through acquisitions. Malone, by contrast, had never been shy in the merger arena.

Associated was advised in the transaction by Salomon Smith Barney. Liberty did not appear to use an outside finanical adviser.


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To: biffpincus who wrote (66)6/2/1999 7:58:00 PM
From: Don S.Boller
   of 76
biffpincus: FOR THOSE HANGING ON (I sold today)...IT WILL
BE VERY INTERESTING TO SEE...How Alex Mandl and John Malone
mesh...with a divided BofD too. These are two powerful men
and could be an oil/water mix...

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To: Don S.Boller who wrote (67)6/3/1999 12:14:00 AM
From: biffpincus
   of 76
"...IT WILL BE VERY INTERESTING TO SEE...How Alex Mandl and John Malone mesh ... with a divided BofD too.
These are two powerful men and could be an oil/water mix..."

Agreed, I really think that Mr. Malone is quite the character and a savy investor - but it could be a strange little mix between the two of them ... The Berkmans were the ultimate in letting their hired thoroughbreds run the race - they had deep pockets and were hands
off : if you were a CEO, you couldn't have better backing ...

What a deal Mr. Malone got (at the expense of current shareholders) ... I still haven't figured out the status of the "tax free" gains this sale represents to shareholders ... does selling now before the deal closes cause a more significant taxable event than if one waits? Am interested in anyone's take on that subject.


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To: biffpincus who wrote (68)6/4/1999 5:30:00 PM
From: zebraspot
   of 76
If you get and hang on to the tax-free shares in Liberty and T, you might benefit eventually from the good deal that they got from AGRP.

The fact that Malone is suddenly interested in the fixed wireless service industry seems to confirm its great future.

After thinking about it, I think I'll keep my AGRP shares, and buy more TGNT, NXLK and WCII on dips.

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To: zebraspot who wrote (69)6/4/1999 5:55:00 PM
From: zebraspot
   of 76
Just saw this:

The Wall Street Journal Interactive Edition -- June 3, 1999
Tech Center

'Fixed Wireless' Is Attracting
Investments From Big Firms


It's called "fixed wireless," and it has fast become a fixation for many big communications companies.

In recent weeks companies including MCI WorldCom Inc., Sprint Corp. and the Liberty Media unit of AT&T Corp. have
spent billions of dollars to establish beachheads in this "broadband" technology. The service is attracting attention because it
allows companies angling to sell interactive video, Internet connections and phone services to reach potential customers
directly -- rather than having to pay tolls to go through the regional Bells, or to build their own expensive wired networks.

As the name implies, fixed wireless is a stationary wireless service. Networks typically include a series of "base stations"
armed with wireless antennas that are connected to other gear. Customers usually need a rooftop antenna. The services
offered, which can include high-speed Internet access and traditional local phone service, are often offered at deep discounts
from the rates charged by traditional providers.

Nobody is making any money on this yet -- in fact, most purveyors of the technology are bleeding a lot of red ink. But some
of the country's savviest high-tech investors see great potential.

Sprint, one of the more bullish spenders, recently announced $1 billion of deals to gobble up People's Choice TV Corp.,
American Telecasting Inc. and Videotron USA, a subsidiary of Canadian cable giant Le Groupe Videotron Ltd. Meanwhile,
MCI WorldCom is paying $350 million to buy CAI Wireless Inc., based in Albany, N.Y., and recently announced plans to
buy two more wireless companies for a total fixed-wireless investment of about $1 billion. These acquisition targets all
provide wireless cable services, which are considered part of the fixed-wireless family.

Another new convert is cable magnate John Malone, chairman of Liberty Media Group. Earlier this week, Liberty announced
plans to buy Associated Group Inc., the largest shareholder of fixed-wireless company Teligent Inc. The all-stock deal valued
at around $2.8 billion, plus the assumption of $187 million in debt. The transaction would give Liberty a 41% stake in
Teligent, considered a highflier in the fixed-wireless world, and a seat on the company's board. Teligent, based in Vienna,
Va., provides businesses with high-capacity telephone and Internet services via rooftop antennas in more than two dozen
markets across the U.S.

Given Liberty's reputation for making smart technology bets, the deal caught the attention of Wall Street. Investors sent
Teligent shares soaring by more than $5 on the day the Associated agreement was announced.

Demanding Customer Base

Liberty said the move was a slam-dunk, considering the growing needs of the broadband audience and a demanding customer
base that needs to move information quickly and seamlessly. "As we continue to move into broadband networks, there will be
more information flowing and a greater need to move information quickly," said Gary Howard, Liberty's chief operating

Still the technology isn't flawless. Some early fixed-wireless systems proved temperamental. Rainy weather faded the service,
and the line-of-sight technology was difficult to install in dense areas.

But analysts agree most of these issues have been solved through technological advancements, and better planning and
construction of systems. "Over time, these companies have demonstrated that the system works," says Ken Hoexter, an
analyst with Goldman, Sachs & Co.

While big-foots such as Mr. Malone's Liberty capture headlines with wireless purchases, smaller carriers are quietly pushing
for their piece of the action, too. Qwest Communications International Inc., a tiny telecommunications company with big
ambitions, agreed earlier this week to invest $90 million for a 19% stake in Advanced Radio Telecom Corp. And a raft of
other buyers are sniffing around for deals.

The wireless race, by all indications, is just getting started, adds Mr. Hoexter. "Since the market dynamics are changing so
quickly, if you blink you might miss the boat."

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To: biffpincus who wrote (64)6/9/1999 2:13:00 PM
From: Tecinvestor
   of 76
The Berkmans have created a legacy for themselves as a result of the Liberty Media deal. IMHO, they ultimately will be remembered as management who arrogantly disregarded AGRP's shareholders while ensuring a place for themselves in their long term alignment and affiliation with John Malone.

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To: biffpincus who wrote (68)6/11/1999 10:50:00 AM
From: Tecinvestor
   of 76

See my Post No. 348 on the Yahoo AGRPA thread.

As I see it, from now until the Liberty Media acquisition is either aborted or concluded, AGRP will move consistent with LMG.A and T. TGNT and TruePosition will no longer be factors in the movement of AGRP.

If you believe Liberty Media's acquisition of AGRP will go through (and there is every likelihood that it will, given the Berkmans' lock on the vote), it seems to me that the prime consideration of whether to hold AGRP depends upon whether you want to end up holding LMG.A and T stock without having to pay the capital gains you have made on AGRP.

Personally, I am going to see what happens with LMG.A and T over the next few weeks before bailing out of AGRP. There is no longer any interest or excitement for me in AGRP (the prospects of a big move as a result of a TruePosition announcement, as well as an acquisition at a premium, are now dead) and the only thing we can look forward to is the upward movement of LMG.A and/or T.

I would add that both LMG.A and T appear to be attractive plays and, assuming a market rebound, I would not be surprised to see AGRP move up based upon the upward movement of LMG.A and T.

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