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SEC Filings

PREM14A
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form PREM14A on 06/26/2015
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To derive an illustrative range of equity values for each of Charter on a standalone basis, Combined New Charter/TWC (under both the $100 cash consideration scenario and the $115 cash consideration scenario), Combined New Charter/TWC/BHN (under both the $100 cash consideration scenario and the $115 cash consideration scenario) and TWC on a standalone basis, Goldman Sachs subtracted from the range of enterprise values it derived for each such company an estimate of the net debt of the applicable company as of December 31, 2015, as reflected in the forecasts.

Goldman Sachs then divided the illustrative ranges of equity values it derived by the total number of fully diluted shares of common stock of (i) Charter on a standalone basis, (ii) Combined New Charter/TWC anticipated to be outstanding after giving effect to the TWC transactions and without giving effect to the BHN transactions (under both the $100 cash consideration scenario and the $115 cash consideration scenario), (iii) Combined New Charter/TWC/BHN anticipated to be outstanding after giving effect to both the TWC transactions and the BHN transactions (under both the $100 cash consideration scenario and the $115 cash consideration scenario), in each case as provided by Charter management, to derive illustrative present values for a share of Charter Class A common stock on a standalone basis, for 0.9042 of one share of Combined New Charter/TWC giving effect only to the TWC transactions (under both the $100 cash consideration scenario and the $115 cash consideration scenario), and for 0.9042 of one share of Combined New Charter/TWC/BHN giving effect to both the TWC transactions and the BHN transactions (under both the $100 cash consideration scenario and the $115 cash consideration scenario), and (iv) TWC on a standalone basis, under Charter management.

The illustrative value ranges as of December 31, 2015 derived from the foregoing analyses are as follows:

 

One share of Charter Class A common stock

$ 177-$220   

0.9042 of one share of Class A common stock of Combined New Charter/TWC, under the $100 cash consideration scenario

$ 171-$229   

0.9042 of one share of Class A common stock of Combined New Charter/TWC, under the $115 cash consideration scenario

$ 171-$233   

0.9042 of one share of Class A common stock of Combined New Charter/TWC/BHN, under the $100 cash consideration scenario

$ 181-$238   

0.9042 of one share of Class A common stock of Combined New Charter/TWC/BHN, under the $115 cash consideration scenario

$ 181-$243   

One share of TWC common stock on a standalone basis, under Charter management

$ 191-$234   

Illustrative Present Value of Future Share Price Analyses

Goldman Sachs calculated illustrative ranges of implied present values as of December 31, 2015 of one share of Charter Class A common stock on a standalone basis; of 0.9042 of one share of Class A common stock of Combined New Charter/TWC under, alternatively, the $100 cash consideration scenario and the $115 cash consideration scenario; and of 0.9042 of one share of Class A common stock of Combined New Charter/TWC/BHN under, alternatively, the $100 cash consideration scenario and the $115 cash consideration scenario.

For purposes of this analysis, Goldman Sachs derived theoretical future values as of December 31, 2019 by:

 

    applying an illustrative range of one year forward EBITDA multiples of 6.5x to 7.5x to the estimate of 2019 Adjusted EBITDA for the applicable company as reflected in the forecasts, including, in the case of Combined New Charter/TWC and Combined New Charter/TWC/BHN, the synergies;

 

    subtracting an assumed amount of net debt equal to the estimate of 2019 Adjusted EBITDA as reflected in the forecasts, multiplied by the midpoint of Charter management’s anticipated range of its leverage ratios;

 

    adding the present value per share as of December 31, 2019 (derived using a discount rate of 9.98%) of estimates of the tax savings anticipated to be realized from Charter’s current net operating losses and other tax attributes;

 

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