Qurate Retail, Inc. Agrees to Repurchase a Portion of its 1.75% Charter Exchangeable Debentures
June 18 2018 - 5:35PM
Business Wire
Qurate Retail, Inc. (“Qurate Retail”) (Nasdaq: QRTEA,
QRTEB) announced that its direct, wholly-owned subsidiary, Liberty
Interactive LLC (“LI LLC”), has agreed to repurchase a portion of
its 1.75% Charter Exchangeable Debentures due 2046 (the
“Exchangeable Debentures”) in privately negotiated transactions
(the “Repurchase”). Approximately $418 million of the Exchangeable
Debentures are expected to be repurchased for total cash
consideration of approximately $457 million, including accrued
interest. Pursuant to the Repurchase Indemnity (as defined below),
GCI Liberty, Inc. (“GCI Liberty”) made an indemnification payment
of approximately $133 million in cash to LI LLC. The balance of the
Repurchase will be funded from cash on hand at Qurate Retail.
Pursuant to an indemnification agreement among Qurate Retail, LI
LLC and GCI Liberty, GCI Liberty is obligated to indemnify LI LLC
for the difference between the purchase price of any Exchangeable
Debenture purchased in one or more privately negotiated
transaction, a tender offer or other purchase transactions, and the
cash delivered in the March 9, 2018 reattribution with respect to
each such purchased debenture, plus any tax benefits associated
with early extinguishment of such purchased debenture (the
“Repurchase Indemnity”), provided that such purchase offer was made
on terms reasonably acceptable to GCI Liberty. The Repurchase
Indemnity will continue to apply to any Exchangeable Debentures so
purchased in any additional purchase offer through September 9,
2018.
Qurate Retail also continues to benefit from an indemnification
agreement with GCI Liberty with respect to the Exchangeable
Debentures for any payments made in excess of the adjusted
principal amount of the debentures to any holder thereof that
exercises its exchange right on or before the put/call date of
October 2023 (the "Exchange Indemnity"). The Exchange Indemnity is
supported by a negative pledge in favor of Qurate Retail on the 1.0
million referenced shares of Class A common stock of Charter held
at GCI Liberty that underlie the Exchangeable Debentures pro forma
for the Repurchase. GCI Liberty's Exchange Indemnity obligation and
the number of shares subject to the negative pledge will be ratably
reduced with respect to any Exchangeable Debentures repurchased by
LI LLC in connection with the Repurchase Indemnity.
There are 2.9317 shares of Charter Class A common stock
attributable to each $1,000 principal amount of the Exchangeable
Debentures, representing an initial exchange price of approximately
$341.10 for each share of Charter Class A common stock.
This press release is neither an offer to purchase, nor a
solicitation of an offer to buy any debentures.
This press release includes certain forward-looking statements,
including statements about privately negotiated transactions
regarding the Exchangeable Debentures and indemnification by GCI
Liberty. These forward-looking statements involve many risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by such statements. These
forward-looking statements speak only as of the date of this press
release, and Qurate Retail expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in
Qurate Retail's expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is
based.
About Qurate Retail,
Inc.
Qurate Retail, Inc. operates and owns interests in a broad range
of digital commerce businesses. Qurate Retail, Inc.’s businesses
and assets consist of its subsidiaries QVC, Inc., HSN, Inc., and
zulily, llc (collectively, the Qurate Retail Group) as well as its
interests in ILG and FTD, among other things.
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