ENGLEWOOD, Colo.—Liberty Media Corp. (NYSE: L, LMC.B) plans to buy all shares of Santa Monica-headquartered Ascent Media Group (Nasdaq: AMGIA) that it does not already own. The deal would make Ascent—the publicly traded parent of such commercial postproduction entities as Company 3, R!OT and Method—a wholly owned subsidiary of Liberty Media.
Liberty is the publicly traded, Englewood-based company that owns interests in video programming, broadband distribution, interactive technology services and communications businesses, including STARZ! and Discovery.
Ascent Media, formerly known as Liberty Livewire Corp., was formed as a result of the 2000 and ’01 acquisitions of The Todd-AO Corp., Four Media Company, Video Services Corp., certain operations of SounDelux Entertainment Group and several other businesses engaged in creative and technical media services, including numerous companies that offer postproduction services to clients in commercial advertising. Those companies include Company 3, Santa Monica and New York; R!OT, Santa Monica, New York and Atlanta; and Santa Monica-based Method. Ascent employs roughly 3,800 worldwide.
Ascent Media CEO William Fitzgerald said he sees this as a very positive step for the company, and evidence of Liberty Media’s support for its business agenda. He noted that for clients of the company, he expects the change to be seamless.
"It’s an opportunity for Ascent to operate more efficiently," he told SHOOT, noting that he expected that the new structure would reduce administrative costs (in terms of the costs associated with managing a publicly traded company). "We feel there is a better opportunity in deploying those costs for other purposes … and creating an easier path for us to manage our capital requirements."
Without disclosing details, he added, "We have what I would characterize as a fairly robust business plan that requires capital. Our every intention is to fulfill that agenda."
To complete the deal, Liberty reported that Ascent Media stockholders would receive 0.1147 shares of Liberty Media Corporation Series A common stock for each share of Ascent Media Group Class A common stock held. Liberty Media currently owns all the issued and outstanding shares of Ascent Media Group Class B common stock.
Because Liberty Media owns in excess of 90 percent of the outstanding common stock, the company expects to close the deal as a "short form" merger under Delaware law. That would mean that neither the approval of Ascent Media’s Board of Directors nor a vote of its stockholders is required. The deal is expected to close during the third quarter of ’03.
According to Ascent Media’s annual report (filed March 27, ’03), for the year ending Dec. 31, ’02, Ascent’s net revenue was $539.3 million, with a net loss of $135.2 million. For the year ending Dec. 31, ’01, in comparison, the company’s net revenue was $592.7 million, with net losses of $436.3 million.
