Liberty Interactive (NASDAQ:QVCA) and GCI (NASDAQ:GNCMA) have entered into a definitive agreement whereby Liberty Interactive will acquire GCI through a reorganization in which certain Liberty Ventures Group assets and liabilities will be contributed to GCI in exchange for a controlling interest in GCI. Liberty Interactive will then separate its controlling interest in the combined company (to be named GCI Liberty) to the holders of Liberty Ventures common stock.
Liberty Interactive will acquire a 77% undiluted equity interest and 84% undiluted voting interest in GCI Liberty. The transaction represents an undiluted enterprise value for GCI of $2.68 billion.
"We are pleased to announce this transaction with GCI," said Greg Maffei, Liberty Interactive president and CEO. "GCI is the largest communications provider in Alaska, generates solid cash flow with upside potential and is a strong fit with the largest businesses in Liberty Ventures. This transaction will ultimately create a standalone Liberty Ventures, reducing the tracking stock discount and enabling an asset-backed QVC Group."
Donne Fisher, former chairman of the board of GCI, and Ron Duncan, GCI's president and CEO, will join the GCI Liberty board of directors.
"This transaction with Liberty Interactive brings GCI back full circle, as GCI was part of TCI until 1986. We couldn't think of a better owner, and look forward to being the largest operating asset within GCI Liberty," said Duncan. "We will continue to run the company with our focus on providing the best value for Alaska customers, offering opportunities for our employees and investing wisely in the Alaska market."
The transaction is subject to both regulatory and shareholder approvals, and is expected to be completed by the first quarter of 2018.
