Liberty Media Group agreed yesterday to pay $755M for
Ascent Entertainment Group and "plans to sell off" Ascent's
sports holdings, including the Nuggets, Avalanche and Pepsi
Center, according to John Rebchook in a front-page report in
the ROCKY MOUNTAIN NEWS. Liberty's offer includes $460M in
cash, or $15.25 per share, which is a 51% premium over
Ascent's $10.13 closing price on Friday, and the assumption
of $295M in debt. But it has been "criticized as being too
low by some shareholders and observers." The selling price
is 13% less than what Liberty agreed to pay last October.
Liberty "will start a tender offer" by February 28 for
Ascent's 29.7 million shares and "expects to complete the
deal by July." The "main asset" Liberty is seeking in the
deal is Ascent's 57% stake in hotel video on-demand service
On Command, although Liberty Exec VP & COO Gary Howard said
that he won't sell Ascent's sports assets at a "fire-sale
price." Howard: "We're a Colorado-based corporation and we
all take a lot of pride that we will find the right buyer
for the teams. But we're in no hurry. We have the
financial strength and resources to operate the teams until
we find the right buyer." Although Howard did not mention
an exact figure he hopes the teams will sell for, he said
that $400M "would not be unreasonable." Two previous failed
deals for Ascent's sports assets included a $461M bid from
Donald Sturm and a $400M bid from Bill and Nancy Laurie.
The Bonham Group Chair Dean Bonham feels Liberty isn't
paying enough because the purchase price puts the total
value of the two teams and the arena at $250M, "far less
than what they are worth." Bonham: "At $755 million I think
they are absolutely stealing (Ascent)." Bonham added that
he "wouldn't be surprised if a hostile bid emerges for
Ascent." Howard, on Liberty possibly holding on to the
teams: "Owning sports teams would not be something we would
do well. ... It's not in our long-term horizon to own these
assets" (ROCKY MOUNTAIN NEWS, 2/23). Ascent will use N.Y.
investment firms Allen & Co. and Wasserstein Perella & Co.
during the bid process. Howard said that there was no "time
frame" on a deal (DENVER POST, 2/23).
CHANGES NOT EXPECTED: Ascent President Don Elliman, on
possible changes to the teams' management structures: "I'm
not expecting any operational changes. There is no reason
for fans to be concerned" (ROCKY MOUNTAIN NEWS, 2/23).
DEAL BREAKER? In Denver, Michael BeDan writes that a
possible sticking point in the deal could be Liberty's
partial ownership of the Knicks and NHL Rangers, via its
stake in Cablevision. While such a dual-ownership conflict
"could prevent league approval" of the deal, both the NBA
and NHL "could make an exception" because Liberty execs say
they "intend to sell" the Nuggets, Avalanche and Pepsi
Center. Howard: "I anticipate (the leagues) will be
flexible with us" (ROCKY MOUNTAIN NEWS, 2/23).
