Heritage Stockholders Approve Buyout By Tele-Communications Inc.
DES MOINES, Iowa (AP) _ Shareholders of Heritage Communications Inc. on Tuesday approved an $887.4 million leveraged buyout of the company by Tele-Communications Inc., the nation’s leading cable television company.
Stockholders of Heritage, the nation’s 10th-largest cable TV company, approved the buyout by a margin of at least 77 percent, said Heritage President James Hoak, who founded the Des Moines-based company in 1971.
TCI, a $575 million a year Denver-based company that has a major stake in about two dozen cable companies, will leave Heritage and its 200 employees headquartered in Des Moines, Hoak said.
The companies on Jan. 31 announced TCI’s offer of $32 a share in cash and securities for Heritage, a cable company that also owns radio and television stations and has interests in communications products, publishing and outdoor advertising. TCI raise the offer to $34 after the stock market bid Heritage shars above $32.
Pending Federal Communications Commission approval, the merged companies plan to sell Heritage’s radio and television stations for $200 million to a group of Heritage officials that include Jack Robinette and Paul Fiddick, who run the company’s broadcasting operations.
Completion of the takeover also was contingent on financing for the leveraged buyout. In a leveraged buyout most of the purchase price is borrowed and is repaid with the target company’s cash flow or the sales of its assets.
Under the buyout agreement, TCI would pay $34, including up to $8 in Tele- Communications stock, for each of the 26.1 million shares of Heritage stock outstanding. TCI has not announced whether shareholders would be paid in cash or what combination of cash and stock would be offered.
Hoak said that he, executive vice president James Cownie and nearly 100 other company executives and outside directors also would receive options to buy up to 18 percent of the company in the next five years.
Heritage has interests in cable television systems serving 980,000 subscribers in 22 states.
It also owns television stations WEAR, Pensacola, Fla.; WCHS, Charleston, W.Va.; WPZT, Plattsburgh, N.Y.; KEVN of Rapid City, S.D.; KDLT of Sioux Falls, S.D.; and KAUT of Oklahoma City. Heritage has a 30 percent interest in television stations WCJB of Gainesville, Fla.; WABI of Bangor, Maine; WPDE of Florence, S.C.; WCTI of Greenville, N.C.; and WDAU of Wilkes-Barre, Pa.
It owns radio stations WBEE-AM of Chicago; WIL-AM and FM in St. Louis; WEMP-AM and WMYX-FM of Milwaukee; WBBF-AM and WMJQ-FM of Rochester, N.Y.; and KDAY-AM of Santa Monica, Cal. The company also has a 30 percent interest in WABI-AM and WBGW-FM in Bangor, Maine.