ST. LOUIS – Charter Communications Inc., a manager of the largest cable television operator in the United States, went public November 9, offering 170 million shares at $19 apiece. The company’s stock priced at the top of its $17 to $19 filing range.
Underwritten by Goldman, Sachs & Co., Bear, Stearns & Co. Inc., Morgan Stanley Dean Witter, Donaldson, Lufkin & Jenrette Securities Corp., Merrill Lynch & Co., Salomon Smith Barney Holdings Inc., A.G. Edwards & Sons Inc. and M. R. Beal & Co., the initial public offering left 170 million shares outstanding.
There were no selling shareholders. Charter Investment Inc. and Vulcan Ventures were venture backers.
The company manages Charter Communications Holding Co., the indirect owner of the largest chain of cable television systems in the U.S., currently serving some 3.7 million customers. In addition to a full range of traditional cable television services, the company has begun offering digital cable television services and interactive video programming.
The $3.1 billion in proceeds expected from the IPO will be used to contribute to Charter Communications Holding and to pay a portion of the cash purchase price of pending acquisitions.
Charter Communications has never been profitable, losing $2.7 million in 1996 and $4.6 million in 1997.
All but two members (Nancy Peretsman and Marc Nathanson) of the company’s board of directors are employed by Charter Investment or Vulcan Ventures. They include Paul Allen, Jerald Kent, William Savoy, David Barford, Mary Pat Blake, Eric Freesmeier, Thomas Jokerst, Kent Kalkwarf, Ralph Kelly, David McCall, John Pietri, Steven Schumm, Curtis Shaw, Stephen Silva and Ronald Nelson. Howard Wood, vice chairman at Charter Investment, will be appointed to the board after the offering.
Charter Communications – Selected Financial
(in thousands, except per share data)
Oct. 1, 1995 Jan. 1, 1998 Dec. 24, 1998 Jan. 1, 1999
to Year Ended Dec. 31 to to to
Dec. 31, 1995 1996 1997 Dec. 23, 1998 Dec. 31, 1998 June 30, 1999
Total revenue 1,788 14,881 18,867 49,731 13,713 468,993
Net income (loss) -531 -2,723 -4,623 -17,222 -5,277 -216,311