Comcast Corp. spent the final weeks of 1999 in a flurry of
deals, locking up a 100 percent interest in Jones Intercable Inc. and buying out another
partnership for systems in New Jersey, Michigan and Florida in transactions valued at a
combined $4 billion.
The Jones Intercable deal -- a stock transaction valued at
$3.2 billion -- supercedes an earlier offer to buy up to 79 percent of the Englewood,
Colo.-based MSO that was criticized as too low.
Although the new deal was nearly identical, Comcast's
stock appreciation and the offer to buy all of the outstanding Jones shares apparently
appeased any disgruntled Jones shareholders.
Comcast shares, which closed at $55.56 each on Dec. 27,
have appreciated 89 percent since Dec. 31, 1998.
The deal values Jones' shares at about $73.06 each --
based on a Comcast closing price of $52.19 on Dec.22, the day the deal was announced --
about a 5 percent premium over the Jones market price.
Earlier last month, a group of three Jones independent
directors hired Donaldson, Lufkin & Jenrette to advise them on the original Comcast
proposal, which may have also helped to accelerate the deal. In December, Comcast said it
did not expect the Jones acquisition to close until sometime in early 2000.
As a result of the agreement, Jones shareholders will
receive 1.4 shares of Comcast class A special common stock for each Jones share they own.
Just days after the Jones deal was announced, Comcast said
it had reached an agreement with the California Public Employees' Retirement System
to buy out the remaining 45 percent of a joint partnership for $750 million in cash.
Called Comcast MHCP LLC, the partnership was formed in 1994
to acquire cable systems with 642,000 subscribers in Detroit, northern New Jersey and Fort
Lauderdale, Fla., from MacLean Hunter Ltd.
The deal will give Comcast 100 percent ownership in the
properties, which it has managed since the partnership was formed. Closing is expected in
the first quarter of 2000.
When CalPERS invested in the partnership in 1994, it was
heralded as the beginning of a new source of financing for cable deals. CalPERS is the
largest U.S. public pension fund, with nearly $155 billion in assets.
The most recent deal also gives CalPERS a good return on
its investment. Its 45 percent stake in the partnership cost it about $250 million five
In an unrelated move, Jones International Networks Ltd.
filed documents with the Securities and Exchange Commission for an initial public offering
aimed at raising $86.3 million. The company, controlled by Jones Intercable founder Glenn
Jones, plans to use the proceeds of the offering to repay debt and for working capital,
including future acquisitions. The company said it would also use some of the money raised
through the IPO to bolster its Internet offerings.
Jones International provides programming to radio stations
throughout the country and has two cable networks -- country music-video channel Great
American Country and the Product Information Network, a joint venture with Cox
Communications Inc. that provides infomercials to cable operators.
Although the number of shares and their offering price have
not been released, Glenn Jones will control 100 percent of the company's class B
super-voting shares after the IPO, and, as a result, substantially all of the
company's voting power.