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Liberty Media buys Ascent

Deal inked for $460 mil cash

Cabler Liberty Media Corp. said Tuesday it plans to expand its holdings by buying pay-per-view TV provider Ascent Entertainment Group Inc. for $460 million in cash, which also adds the Denver Nuggets and Colorado Avalanche sports teams to its portfolio.

Deal comes three months after talks between the two Denver-based companies broke down and a day after Liberty Media agreed to take a 20% stake in Canadian radio and specialty television company Corus Entertainment Inc.

Liberty, a cable TV programming arm of AT&T, said it plans to unload the two sports teams, as well as the Pepsi Center, the arena in which the professional basketball and hockey teams play, to a suitable buyer sometime soon after the merger is completed in the second quarter.

Through the deal, Liberty Media will pay $15.25 a share in cash for each share of Ascent, representing a 50% premium over Ascent’s Friday closing price of $10.13.

Ascent owns 57% of leading pay-per-view service On Command, which distribs programming to 950,000 rooms in 3,300 hotels worldwide. Its network services division also transmits NBC’s national programming (via satellite) to local affiliates in the U.S.

Ascent’s pay-per-view service is said to be what attracted Liberty to inking the deal.

“Given our extensive relationships in video programming, interactive television and high speed data services, the acquisition of On Command will position us perfectly to offer even better and more comprehensive services for business and recreational travelers,” said Liberty executive veep Gary S. Howard.

The total transaction value, including assumed or refinanced debt, will be about $755 million, Liberty Media said.

Shares of Ascent rose 46% on Tuesday, up $4.69 to close at $14.81. Liberty stock fell 63¢ to close at $50.

Liberty Media originally agreed to buy Ascent in October in a stock deal valued at the time at $513.6 million, but the deal was conditional upon the sale of Ascent’s sports-related business to the Sturm Group.

Liberty terminated its agreement to buy Ascent in late November after Ascent’s deal with Sturm fell apart when Colorado billionaire Donald Sturm could not reach an agreement with the city of Denver over a clause guaranteeing that the teams would play in the city for at least 25 years.

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