Bill Bresnan is trolling for dollars to help complete his pending $735 million purchase of systems in Montana, Colorado and Wyoming from AT&T Broadband, as his plans to sell some high-yield bonds have apparently fallen through.
His Bresnan Communications Inc. has already locked up the equity funding for the deal, from private-equity firm Providence Equity Partners Inc. and Toronto-Dominion Capital, the private equity arm of Toronto-Dominion Bank.
Sources familiar with the matter said that the private-equity portion of the deal is probably in the $250 million range.
Those same sources also said that Bresnan has received a commitment letter from at least one bank: Toronto-Dominion.
Originally Bresnan had hoped to finance about 15 percent of the total deal — the purchase price, plus $300 million over the next three years for upgrades — with high-yield bonds. But the high-yield market has declined with the struggling economy, so that has become more difficult.
"The high-yield market is gone," said one source familiar with the matter. "They [Bresnan] are trying to restructure the deal in a way that works without having to rely on the high-yield market."
Bresnan Communications Inc. president Bill Bresnan would not comment on financing issues, citing confidentiality agreements. But he said the company is on track to close the AT&T deal by the end of the year.
According to sources familiar with the matter, Bresnan has several choices to replace the high-yield financing, including a return to the banks or through financing companies like GE Capital Corp. According to one source, GE Capital was expecting to meet with Bresnan representatives last week.
"Finance companies have more leniency than banks," said one source in the finance community.
SOME KEY HIRES
Bresnan also has been assembling a management team to supplement the existing staff. Most of the hires are in accounting, finance and human-resources positions, sources said.
At present, Bresnan Communications has about 30 employees, including the core team of executive vice president Daniel Bresnan; senior vice president of community development Patrick Bresnan; senior vice president and general counsel Robert Bresnan; executive vice president and CFO Jeffrey DeMond, senior vice president telephone and data services Leonard Higgins; senior vice president and controller Andrew Kober; senior vice president of engineering Gareth McIntosh; senior vice president of business development Terry St. Marie; and vice president of finance and investor relations Margot Bright.
Bresnan Communications tried for more than a year to win the AT&T systems, which have about 320,000 subscribers. It beat out bids from Alaska cable and telephone service provider General Communications Inc.
Bresnan also had planned to invest as much as $300 million over the next three years to upgrade the properties.
Although the systems are located in largely rural areas, they do include some fairly sizable communities, including Bozeman, Helena and Billings, Mont.; Grand Junction, Colo.; and Cheyenne and Laramie, Wyo. Several of those communities are also located near universities, a favorite of Bresnan in the past.
Bresnan sold his Bresnan Communications Co. — which had about 690,000 subscribers — to Charter Communications Inc. in 2000 for about $3.1 billion in cash, stock and assumed debt.