AT&T Registers Rainbow Shares
By Mike Farrell -- Multichannel News, 11/16/2001 6:25:00 AM
AT&T Corp. registered 12.8 million shares of Rainbow Media Holdings Inc. tracking stock for sale Friday.
Such a sale could raise $277.6 million based on Rainbow's closing price of $21.69 per share Thursday.
According to a prospectus filed early Friday with the Securities and Exchange Commission, Rainbow parent Cablevision Systems Corp. said AT&T and its subsidiaries will sell 12.8 million shares of the Rainbow tracker and up to 1.9 million additional Rainbow shares to cover underwriter overallotments.
AT&T will retain about 11.7 million shares of Rainbow, or about 16.2 percent of the programming unit's outstanding stock.
Cablevision spun off Rainbow -- which tracks programming networks Bravo, American Movie Classics, WE: Women's Entertainment, The Independent Film Channel, MuchMusic USA and interests in several regional sports networks -- in March. NBC owns about 34 percent of Rainbow stock.
This is the second large Cablevision holding AT&T has sold in less than one month. On Oct. 18, AT&T sold the bulk of its holdings in Cablevision -- 19.2 million shares -- raising $1.3 billion.
AT&T also sold, through a trust, 23.4 million shares of a mandatory exchangeable trust security that will be exchangeable into up to 23.4 million shares of Cablevision common stock in three years. AT&T said it would use proceeds to pay down debt.
AT&T inherited the Cablevision stake in its March 1999 acquisition of Tele-Communications Inc. The Rainbow shares came as part of a distribution to Cablevision shareholders.
Bear Stearns & Co. and Merrill Lynch & Co. are joint book-running managers for the Rainbow offering. Banc of America Securities LLC and Salomon Smith Barney are the joint lead managers.
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