UnitedGlobalCom Inc.'s stock price more than doubled Monday to $3.02 after it
announced that Liberty Media Corp. will take a substantially larger interest in
the European cable operator.
The announcement removed the uncertainty that has surrounded the Liberty/UGC
transaction since it was first announced in May. UGC rose $1.62 per share
'I guess the market liked it,' UGC spokesman Jim Carlson said.
Liberty's share price rose 5 cents to $13.20 each.
Liberty and UGC will form a new entity, now called 'new United.' Liberty will
lend $896 million to UGC subsidiary United Pan-European Communications N.V.
(UPC), provide $200 million in cash and hand over $1.4 billion in UPC bonds.
For that, Liberty gets 76 percent equity -- 297.8 million shares -- in new
The earlier deal would have had Liberty take a 44 percent stake in UGC.
Also now, Liberty will not contribute Latin America cable assets to the new
As part of the May deal, Liberty was to contribute its half ownership of
Argentine cable operator Cablevisión S.A. and stakes in two large Latin American
programmers, Pramer S.C.A. (100 percent) and Torneos y Competencias S.A (40
As in the May agreement, UGC's management, including chairman Gene Schneider,
will continue to operate it.
Liberty also agreed to a 10-year standstill and voting agreements that will
keep control and governance of new United in the hands of UGC's founders,
UGC has about 10.6 million cable, 671,000 telephony and 672,000
high-speed-data subscribers in 26 countries in Europe, Latin America and