Charter Communications Inc.'s stock, down more than 80 percent for the year,
got a jolt Monday after reports surfaced that chairman Paul Allen may be
making moves to take the company private.
In its Monday-morning editions, The New York Times, citing unnamed
sources, claimed that Allen, also the cofounder of Microsoft Corp., was
contemplating buying more Charter stock and debt, possibly in a move to take the
Charter officials declined comment.
The news encouraged investors, who drove Charter stock up nearly 37
percent during trading Monday to $3.61 per share, up 37 percent, or 95 cents
Allen could buy Charter's remaining outstanding shares cheaply -- they closed
at $2.64 each July 26. With roughly 55 percent of Charter's class-A common
stock already in his possession, Allen could pay double last Friday's closing
price for the remaining 133 million shares for about $700 million.
Allen and several other company executives have been buying Charter stock on
the open market recently, with Allen spending about $20 million to buy more than
5 million shares.
Coupled with his holdings in Charter's supervoting shares, Allen controls
about 93 percent of the vote at the company.
Some of Charter's $17 billion in debt is currently trading at about 35 cents on
Allen, according to Forbes magazine's list of the 400 richest people
in America, is said to be worth $28.2 billion personally.
The Charter buzz, coupled with a 447-point gain in the Dow Jones Industrial
Average, also helped to push up the rest of the sector.
Comcast Corp. gained $2.15 (11.7 percent) to $20.60 and AOL Time Warner Inc. --
fueled by reports that it was close to a settlement with AT&T Corp. about
unwinding its Time Warner Entertainment partnership -- rose 67 cents to $11.57.
AT&T closed at $9.74, up 60 cents.
Other gainers included: Insight Communications Co. Inc. ($8.80, up 41 cents),
Mediacom Communications Corp. ($5.27, up 25 cents), Cox Communications Inc.
($26.15, up $2.23) and Cablevision Systems Corp. ($7.76, up $1.01).