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|LIBERTY BROADBAND CORP filed this Form SC 13D/A on 06/01/2015|
Time Warner Cable Transactions
Background Information in Connection with the Time Warner Cable Transactions
On May 23, 2015, the Issuer entered into the Mergers Agreement with TWC, New Charter, Merger Sub 1, Merger Sub 2 and Merger Sub 3 providing for the TWC Transactions. In connection with the proposed TWC Transactions, on May 23, 2015, the Reporting Person entered into (i) the Charter Investment Agreement with Charter and New Charter, (ii) a contribution agreement with LIC, Charter, New Charter and Merger Sub 1 (the Charter Contribution Agreement), (iii) a voting agreement with TWC (the TWC Voting Agreement) and (iv) a proxy and right of first refusal agreement with LIC (the LIC Proxy Agreement).
Charter Investment Agreement
Pursuant to the Charter Investment Agreement, on the Closing Date, immediately following the closing of the Parent Merger, Liberty will purchase from New Charter $4.3 billion of New Charter Shares at a price per share of $176.95 (as adjusted by the applicable exchange ratio). The Charter Investment Agreement contains customary representations and warranties, and provides that the parties thereto will execute a customary registration rights agreement in connection with the closing of the TWC Transactions. The Charter Investment Agreement also provides that, among other things, (i) the Issuer will use the proceeds from the New Charter Investment to fund a portion of the cash consideration for the TWC Transactions pursuant to the Mergers Agreement, (ii) Charter shall conduct its business in the ordinary course and will not issue any equity interests prior to the Closing Date, subject to certain exceptions, including relating to equity compensation awards, (iii) the Issuer will not amend, waive or modify any provision of the Mergers Agreement in a manner that is adverse to the Reporting Person without the Reporting Persons prior written consent and (iv) Liberty will use its reasonable best efforts to cause the Investors to perform their respective obligations under the Investment Agreements. The closing of the transactions contemplated by the Charter Investment Agreement is subject to certain customary conditions, including, but not limited to, (i) the approval of the Issuers stockholders of the issuance of New Charter Shares pursuant to the New Charter Investment, (ii) the expiration or termination of the applicable waiting period under the HSR Act for Libertys purchase of the New Charter Shares, (iii) the approval for listing of the New Charter Shares on Nasdaq, and (iv) the closing of the transactions contemplated by the Mergers Agreement.
Existing Stockholders Agreement
The Charter Investment Agreement amends the Existing Stockholders Agreement to provide that (i) Charter will continue to include Libertys designees to the Issuer Board in managements slate for nominees for election as a director through the Issuers 2019 annual meeting, (ii) certain provisions of the standstill are waived to permit the transactions contemplated by the Mergers Agreement, the Charter Contribution Agreement, the Charter Investment Agreement and the LIC Proxy Agreement, and (iii) to provide for director compensation for each of Libertys designees on the Issuer Board.
Proxy Statement and Shareholder Approval
The Issuer has agreed to promptly prepare and file with the SEC a proxy statement/prospectus on Form S-4 for a special meeting of its stockholders to approve the issuance of the New Charter Shares to be purchased by the Reporting Person.
Section 203 Approval; Business Combinations
The board of directors of New Charter (the Board) will adopt resolutions necessary to approve (x) each of Liberty and certain current and future related persons as an interested stockholder and (y) the acquisition by such persons of New Charter Shares, in each case, for purposes of Section 203 of the Delaware General Corporation Law. The Charter Investment Agreement contains an agreement that the certificate of incorporation of New Charter will not include the business combinations provision set forth in Article EIGHTH of the Issuers existing Amended and Restated Certificate of Incorporation (or any comparable provision thereto).