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Filed by: UnitedGlobalCom, Inc.
This communication is filed pursuant to
Rules 165 and 425, as promulgated under
the Securities Act of 1933, as amended.
Subject Company: UnitedGlobalCom, Inc.
Commission File No. 000-21974
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UnitedGlobalCom, Inc. (ticker: UCOMA, exchange: NASDAQ) New Release -
Monday, June 26, 2000
UNITEDGLOBALCOM AND LIBERTY MEDIA AGREE TO COMBINE INTERNATIONAL
BROADBAND ASSETS
DENVER, June 26 /PRNewswire/ -- UnitedGlobalCom, Inc. ("United") (NASDAQ:
UCOMA), the largest broadband communications provider of video, voice and data
services outside the U.S., and Liberty Media Corporation ("Liberty") (NYSE:
LMG.A, LMG.B), which holds interests in a broad range of video programming,
communications, technology and Internet businesses throughout the world, today
announced an agreement that will significantly strengthen the relationship
between the two companies by strategically combining many of their broadband
interests outside the U.S.
The agreement calls for United to acquire certain of Liberty's international
broadband distribution and programming assets in exchange for $200 million in
cash and 75.3 million shares of United's Class B common stock. These shares
represent a 38% economic and a 72% voting interest in the company. Liberty will
be bound by voting and standstill agreements with United and certain of its
controlling shareholders, and will have the right to appoint four out of 12
representatives to the United board. The Liberty assets to be acquired include:
o A 25% indirect, economic interest in Telewest Communications plc (LN:TWT;
NASDAQ:TWSTY), the second largest broadband communications provider in the
United Kingdom with approximately 4.7 million homes passed, 1.2 million
cable television subscribers, and 1.7 million fixed telephony subscribers.
Liberty will transfer to United 99% of a limited liability company (LLC)
which holds 724.3 million ordinary shares of Telewest. The remaining 1% of
the LLC and sole management power over the LLC will be held by Liberty .
United will obtain a right of first refusal over the transfer of these
interests.
o Liberty's Latin American broadband interests including:
- A 28% stake (with a right to increase to 50%) i Cablevisioon S.A. of
Argentina, the largest cable television operation in Latin America
with over 3.4 million homes passed and 1.5 million subscribers.
- Regional programming services including: 100% o Pramer SCA, which owns
and/or distributes 18 channels principally to the Argentine market; a
40% stake in Torneos y Competencias S.A., the leading provider of
sports and entertainment programming in Argentina; and the Latin
American operations of the Gems Network;
- Other distribution assets, including: 49% of Liberty Cablevisioon of
Puerto Rico; 41% of Grupo Portatel, a wireless broadband service
provider in Mexico; and 43% of Digital Latin America, a joint venture
with Hicks Muse and Motorola to build a digital satellite distribution
platform for the region.
<PAGE>
o Certain other broadband interests held by Liberty, including a 15% stake in
Crown Media Holdings, Inc., distributor of Odyssey and the Hallmark
Channel; and 20% of Premium Movie Partnership, a movie channel joint
venture in Australia.
o In addition, United will be granted rights of first offer, subject to
existing rights of third parties, with respect to Liberty's programming and
distribution assets in Japan, as well as rights of first offer and certain
other rights with respect to Liberty's broadband interests in other
markets.
United will contribute the indirect interest in Telewest to its subsidiary
United Pan-Europe Communications ("UPC") (AEX: UPC; NASDAQ: UPCOY) in exchange
for 128.2 million UPC shares, which will increase UnitedGlobalCom's ownership in
UPC to approximately 61%.
Gene Schneider, Chairman and CEO of United, said, "Simply put, this transaction
achieves our most important strategic objectives. Specifically, it:
o expands UPC's footprint to include the U.K., Europe's most advanced
broadband market;
o increases United's ownership in UPC to 61%;
o strengthens our relationship with Liberty, one of the world's most
successful media and communications companies;
o significantly increases our presence in Latin America; o represents a
transaction share price which more closely reflects the underlying value of
our businesses than the current share price; and,
o keeps control of United in the hands of its founders;
I couldn't be more pleased with this deal and look forward to an even broader
relationship with John Malone and the Liberty team." John Malone, Chairman of
Liberty Media, said: "I have known Gene Schneider for over 30 years and have
tremendous respect for the management team and strategic vision that he has
developed in the international broadband arena. It is in large part due to our
confidence in United's strategy, and the value creation opportunity associated
with this strategy, that we at Liberty have chosen to enter into this important
strategic relationship." Mike Fries, President and COO of United, said, "Over
the last six months we have made clear our plans to create a Latin American
broadband platform, similar to our successful operations in Europe and
Australia. With the acquisition of Liberty's distribution and programming
interests in the region, we will be the largest operator with interests in over
5.8 homes passed and 2.2 million subscribers and a range of valuable programming
businesses. It is our intention to consolidate these interests, potentially with
existing partners and other operators, into a regional holding company which
could seek a public listing in the months ahead." Robert Bennett, President and
CEO of Liberty, said, "We have often stated Liberty's goal of creating scale in
the business of broadband distribution. With scale, broadband distribution
assets can be very attractive in
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their own right and they also can serve as a platform for the creation of
content assets. This transaction is a unique opportunity for us to greatly
expand the scale of UGC's operations and to become the largest shareholder of
that dynamic company." Mark Schneider, CEO of UPC, said: "We are extremely
pleased to have secured such an important economic stake in Telewest, a key
player in the highly attractive U.K. broadband market. We also look forward to
working with Telewest management to explore broader strategic relationships
between our two companies." Closing of the transaction is subject to certain
regulatory, shareholder and third party approvals which the parties expect to
complete early in the fourth quarter. Donaldson, Lufkin & Jenrette and Morgan
Stanley Dean Witter advised United on this transaction. CS First Boston assisted
Liberty on this transaction.
* * *
About UnitedGlobalCom:
UnitedGlobalCom is the largest broadband communications provider of video, voice
and data services outside the U.S. With operations in 26 countries,
UnitedGlobalCom's networks reach nearly 26 million homes and businesses and
serve more than 12.8 million video customers and 2 million telephony access
lines, including announced transactions. In addition, its high speed Internet
access business has more than 200,000 accounts. UnitedGlobalCom's significant
operating subsidiaries include United Pan-Europe Communications N.V. (UPC) (51%
owned), the largest pan-European broadband communications company; Austar United
Communications (72% owned) the fastest growing satellite, cable television and
telecommunications provider in Australia and New Zealand; and VTR GlobalCom
(100% owned), the largest cable television and competitive telephony provider in
Chile.
About Liberty Media:
Liberty Media holds interests in a broad range of video programming,
communications, technology and Internet businesses in the United States, Europe,
South America and Asia.
About UPC:
Headquartered in Amsterdam, UPC is one of the most innovative broadband
communications companies in Europe and owns and operates the largest
pan-European group of broadband communication networks. UPC provides cable
television, telephony, high-speed Internet access and programming services in
eighteen countries across Europe and in Israel. As of March 31, 2000, on an
aggregate basis (pro-forma for announced acquisitions), UPC's footprint reached
15.8 million franchised homes and 12.9 million homes passed with approximately
8.4 million basic cable subscribers. In addition, UPC systems had 271,400
residential telephony lines and 22,500 business telephony lines as well as
176,800 residential Internet subscribers and 4,300 business Internet
subscribers.
UPC is a consolidated subsidiary of Denver based UnitedGlobalCom Inc. ("United")
(NASDAQ: "UCOMA") and Microsoft has an interest of approximately 8.0% in UPC.
UPC shares are traded on the Amsterdam Stock Exchange ("UPC") and NASDAQ
("UPCOY").
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About Telewest:
Telewest is Britain's leading integrated broadband communications company.
Telewest's broadband cable networks now pass more than 4.7 million homes, with
more than 1.6 million households choosing Telewest for their multi-channel
television, telephone and Internet services. In the business sector, Telewest's
voice and data communications links are used by over 58,000 companies and other
public and private sector organizations. Telewest recently acquired 100% of
Flextech plc which is a major supplier of video channels, Internet content and
interactive TV to cable, satellite and digital terrestrial platforms in the UK.
Flextech is the BBC's commercial pay TV partner and also provides management
services to Discovery UK.
Note:
THIS ANNOUNCEMENT CONCERNING THE UNITED/LIBERTY MEDIA TRANSACTION IS
NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER TO SELL
SECURITIES. THE OFFER WILL BE MADE ONLY THROUGH A PROSPECTUS. IN
CONNECTION WITH THIS PROPOSED TRANSACTION, UNITED WILL FILE A PROXY
STATEMENT/REGISTRATION STATEMENT WITH THE SEC AND A PROSPECTUS WILL BE
INCLUDED IN THAT REGISTRATION STATEMENT. OTHER MATERIALS RELATING TO THE
MERGER WILL ALSO BE FILED WITH THE SEC. INVESTORS ARE URGED TO READ THE
PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS TO BE FILED WITH
THE SEC BECAUSE THEY WILL INCLUDE IMPORTANT INFORMATION.
MATERIALS FILED WITH THE SEC WILL BE AVAILABLE ELECTRONICALLY WITHOUT
CHARGE AT AN INTERNET SITE MAINTAINED BY THE SEC. THE ADDRESS OF THAT
SITE IS HTTP://WWW.SEC.GOV. IN ADDITION, THE PROXY STATEMENT/PROSPECTUS
FILED WITH THE SEC WILL BE MAILED TO UNITED SHAREHOLDERS AND MAY BE
OBTAINED WITHOUT CHARGE FROM UNITED UPON REQUEST. DOCUMENTS FILED WITH
THE SEC WITH RESPECT TO THE TRANSACTION MAY BE OBTAINED FROM UNITED BY
DIRECTING A REQUEST TO RICK WESTERMAN, CHIEF FINANCIAL OFFICER,
UNITEDGLOBALCOM, INC., 4643 S. ULSTER STREET, SUITE 1300, DENVER, CO
80237.
THE IDENTITY OF PERSONS WHO MAY BE CONSIDERED "PARTICIPANTS IN THE
SOLICITATION" AND THE DESCRIPTION OF THEIR INTERESTS IS AVAILABLE IN THE
ANNUAL MEETING PROXY STATEMENT ON SCHEDULE 14A FILED BY UNITED ON MAY 1,
2000.
EXCEPT FOR HISTORICAL INFORMATION CONTAINED HEREIN, THIS NEWS RELEASE
CONTAINS FORWARD LOOKING STATEMENTS WHICH INVOLVE CERTAIN RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE EXPRESSED OR IMPLIED BY THESE STATEMENTS. THESE FORWARD LOOKING
STATEMENTS INCLUDE CONSUMMATION OF PLANNED ACQUISITIONS, LAUNCH OF NEW
SERVICES, AND OTHER STATEMENTS CONCERNING GROWTH, AS WELL AS OTHER
FACTORS DETAILED FROM TIME TO TIME IN THE COMPANIES FILINGS WITH THE
SECURITIES EXCHANGE COMMISSION.
SOURCE: UnitedGlobalCom, Inc.
CONTACT: investors: Rick Westerman, CFO, 303-220-6647, fax 303-770-3464,
[email protected], or press, Jim Carlson, Corporate Communications,
303-220-6662, fax 303-770-4207, mobile 303-808-4955, [email protected], both
for UnitedGlobalCom; or Vivian Carr, VP Investor Relations of Liberty Media,
877-772-1518, fax 720-875-5445, [email protected]; or Miranda Curtis,
President of Liberty Media International, 44-207-299- 5901, fax 44-207-299-5906,
[email protected]/.
