AT&T Registers Rainbow Shares
By Mike Farrell
AT&T Corp. registered 12.8 million shares of Rainbow Media Holdings Inc.
tracking stock for sale Friday.
Such a sale could raise $277.6 million based on Rainbow's closing price of
$21.69 per share Thursday.
According to a prospectus filed early Friday with the Securities and Exchange
Commission, Rainbow parent Cablevision Systems Corp. said AT&T and its
subsidiaries will sell 12.8 million shares of the Rainbow tracker and up to 1.9
million additional Rainbow shares to cover underwriter overallotments.
AT&T will retain about 11.7 million shares of Rainbow, or about 16.2
percent of the programming unit's outstanding stock.
Cablevision spun off Rainbow -- which tracks programming networks Bravo,
American Movie Classics, WE: Women's Entertainment, The Independent Film
Channel, MuchMusic USA and interests in several regional sports networks -- in
March. NBC owns about 34 percent of Rainbow stock.
This is the second large Cablevision holding AT&T has sold in less than
one month. On Oct. 18, AT&T sold the bulk of its holdings in Cablevision --
19.2 million shares -- raising $1.3 billion.
AT&T also sold, through a trust, 23.4 million shares of a mandatory
exchangeable trust security that will be exchangeable into up to 23.4 million
shares of Cablevision common stock in three years. AT&T said it would use
proceeds to pay down debt.
AT&T inherited the Cablevision stake in its March 1999 acquisition of
Tele-Communications Inc. The Rainbow shares came as part of a distribution to
Cablevision shareholders.
Bear Stearns & Co. and Merrill Lynch & Co. are joint book-running
managers for the Rainbow offering. Banc of America Securities LLC and Salomon
Smith Barney are the joint lead managers.
Weekly digest of streaming and OTT industry news
Thank you for signing up to Multichannel News. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.