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
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.