Liberty Media backs out of LSAT acquisition

Liberty Media has backed away from a plan to acquire all of the issued and outstanding shares of Liberty Satellite & Technology [LSAT] that it doesn’t already own. Instead, it will proceed with a previous deal to contribute its 100% ownership in Ascent Entertainment Group and 89% ownership in Liberty Satellite in exchange for 340 million LSAT shares.

In a written statement, Liberty Media said investor reaction to the deal made it “difficult to consummate a merger with LSAT on the terms we proposed in October.” Because a previously associated binding agreement increased Liberty Media’s LSAT stake to 85%, “we did not think that it was in Liberty Media’s interest to continue to pursue the merger alternative,” the statement said.

The LSAT deal follows an earlier announcement by Liberty Media that it would take a 76% stake in UnitedGlobalCom [UGC]. That deal was announced in June 2000 and later modified so that Liberty would retain its Argentine and other Latin American assets. Liberty will continue an $896.1 million exchangeable loan, $200 million in cash, $1.44 billion in notes and other items in exchange for the 76% share.

The deal was seen as good news for heavily debt-laden Dutch-based cable firm United Pan-Europe Communications [UPC], which is owned by UGC.

--Jim Barthold, senior editor