Forstmann to Sell GI Stake

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Eight years after acquiring General Instrument Corp.,
buyout firm Forstmann Little & Co. said last week that it wants to sell its remaining
12.5 percent stake in the cable-equipment supplier.

Forstmann Little -- which had whittled its stake through
GI's initial public offering in 1992 and through three secondary offerings --
registered its 21.7 million GI shares for sale or distribution to its limited partners.
About 17 million shares are to be sold in a secondary offering.

The firm also registered to sell its 14.7 percent stakes in
CommScope Inc. and General Semiconductor Inc., the other companies that split from the
former GI last October.

Since the 1990 buyout, the companies' combined
enterprise value had grown to $6 billion from $1.5 billion, and senior partner Ted
Forstmann said in a prepared statement that it was time to let its limited partners
"make their own investment decisions" regarding the stakes.

Todd Koffman, an equity analyst who follows GI at Raymond
James & Associates in Tampa, Fla., said he expects the stock to be sold on the open
market to institutional buyers, adding that Forstmann's move is no reflection on GI.

"I don't think that this is indicative of any
fundamental change in their business," Koffman said.

Since last October's split-up, GI, which was briefly
called NextLevel Systems Inc., has seen its stock price double, from about $13 to around
$26, before falling to $22.48 as of midday last Friday as part of last week's global
stock sell-off. CommScope had done nearly as well, but General Semiconductor has tumbled
from about $12 to around $8.

Forstmann Little's GI stake is roughly equivalent to
that acquired by Tele-Communications Inc. from the sale of TCI Ventures Group's
set-top-authorization business to GI.

It appears that TCI may be able to steer the Forstmann
Little block into friendly hands. According to a Securities and Exchange Commission filing
by GI earlier this month, before selling its stock to a third party, Forstmann Little has
to offer to sell the shares to TCI on the same terms.

TCI also has unvested warrants to buy another 21.4 million
GI shares, in connection with its digital set-top contract.

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