Date: Fri 07-Aug-1998

Publication: Bee

Author: KAAREN

Quick Words:

Charter-Communications-Allen

Full Text:

Billionaire Paul Allen Acquires Charter Communications For $4.6B

(with photo)

ST LOUIS, MO -- Technology investor Paul G. Allen has entered into an

agreement to acquire Charter Communications, the nation's tenth-largest cable

company, for $4.6 billion.

Mr Allen, co-founder of Microsoft Corp, will combine Charter with his recently

acquired other cable investment, Marcus Cable, to form the nation's seventh

largest cable company, serving 2.4 million customers. The acquisition of

Charter is Mr Allen's largest ever personal investment. The price represents

approximately 14 times the company's projected 1999 operating cash flow.

Mr Allen's "Wired World" portfolio of new media, entertainment and technology

companies, plus ownership of basketball's Portland Trail Blazers and

football's Seattle Seahawks, gives him an estimated net worth of at least $21

billion, according to Forbes magazine.

The agreement to purchase Charter was signed on July 29 and was effective

immediately. It is expected to close by the end of the year, pending franchise

and government approval. The terms of the financing were not disclosed. The

new company has not yet been named.

Charter Communications was founded in 1993 and serves more than 1.2 million

customers in 19 states. It provides cable television service to Newtown and 13

other towns in the greater Danbury area.

Jeffrey A. Marcus, founder of Dallas-based Marcus Cable, will serve as

chairman of the combined company. Jerald L. Kent, chief executive officer of

Charter, will become the CEO of the combined organization, reporting to the

board of directors. The company will consolidate its executive offices in St

Louis, the home town of Charter, while maintaining a facility in Dallas.

"This investment marks another step forward in my Wired World strategy, which

is a connected future marked by the merger of high-bandwith data channels, the

power of the personal computer and the availability of compelling content," Mr

Allen said. "As I said when I invested in Marcus Cable earlier this year,

cable companies are uniquely positioned to deliver the next generation of

advanced data and transmission services. This, combined with the company's

strong management team, made Charter Communications a compelling investment,

and a perfect match for Marcus Cable. I look forward to delivering the next

generation of digital products and services to our customers, and I look

forward to working with Jerry Kent and Jeff Marcus to maximize the value of

these two companies."

Gene Knoblauch, senior vice president of operations for Charter

Communication's northeast region, said the partnership with Paul Allen puts

Charter in a position to become one of the primary leaders in the industry.

"What does this mean to the greater Brookfield, New Milford and Newtown areas?

The Charter team here remains committed to service and quality programming. If

anything, our new financial partnership will enable us to accelerate our

investment in new technology," Mr Knoblauch said.

Paul Allen's primary companies include Asymetrix Corp, Vulcan Ventures Inc and

Vulcan Northwest Inc, all of Bellevue, Wash., and Interval Research Corp of

Palo Alto, Calif. He is a partner in the entertainment studio DreamWorks SKG

and holds investments in more than 50 new-media companies. He co-founded

Microsoft Corp with Bill Gates in 1975 and served as the company's executive

vice president of research and new product development, the company's senior

technology post, until 1983. He also has created six foundations which support

the arts, medical, forest protection, and other charitable needs in the

Pacific Northwest. He is also the founder of the Experience Music Project in

Seattle.