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GNCMA - General Communications


Packer16

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Can someone point me to the recorded conference call (or a transcript of it) conducted by Maffei & Duncan after the General Communication deal was announced? TIA

 

Transcription attached. Hope this helps.

RD

 

Reads like ALSK will be under the acquisition crosshairs at some point down the road by GCI Liberty.

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What's the rationale for the issuance of preferred shares as part of this transaction?

 

Malone loves his merger securities and complicating m&a as much as possible...

 

Doesn't give away too much of the common (they like to do big buybacks of their levered common stubs to juice returns for common holders) while at the same time, doesn't count as debt.

 

Could be a Greenblatt YTCBASMG (jeez that book title blows) situation where an attractive buying opportunity comes if holders dump the preferred.

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I would guess the rationale for the preferred is that it is cheap additional leverage. It's already levered 5x, so they probably don't want to issue additional debt. It is cheaper to finance through preferred than issuing equity to pay the purchase price. Given that dividends are to some extent in vogue and Malone securities tend to be heavily followed, I'm not quite sure how cheap the preferred will get. It already pays a fat dividend and barring an exogenous event, I doubt it will get super cheap. That being said, if I had to put my money somewhere I would bet that the common is a far more attractive security than the preferred given that it retains substantially more upside especially in an environment where interest rates might rise. Rising interest rates devalues fixed instrument securities.

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The GNCMA discount to LVNTA has rapidly closed over the last few days to around 1%. Something going on? It seems a little tight given that the closing is still six months away or so

 

Attack of the Liberty fanboys. Also the big sales job on that blog that's been making the rounds re: LVNTA/GNCMA

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Guys,

 

This is a small position for me (a mistake as Packer was telling me it's still really cheap when it was trading in the high teens).  Hence, I have not read all the small prints.  With every Malone transaction, one must understand where the value is going to.  So really dumb question here, do we need to make an election?  I don't see any notice from my broker, Interactive Brokers.  Does everyone automatically get those securities? Or do we need to elect them? 

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Is the GLIBP $25 liquidation preference essentially equivalent to par value on a bond?

 

I don't think its good to confuse debt with preferred terms. You can about the structure here:

https://www.sec.gov/Archives/edgar/data/808461/000110465918015741/a18-7767_2ex3d1.htm

 

At the redemption, they will be redeemed for liquidation price of $25 + accrued dividends.

 

Didn't wake up early enough for market open to snag some at ~<$20, but was able to pick up a bit at $21.50. Only wish I was able to pick up more!

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