US entrepreneur John Malone's Liberty Media isplanning to buy IDT Corporation for $186m in cash and the assumption ofundisclosed existing debt.
The strategic move marks an ideal marriage between carrier and content.Under a five-year output deal Liberty-owned cable operator Starz EntertainmentGroup will carry select IDT Entertainment CG animated releases and live actionprogramming.
IDT shares leapt $1.35 to $12.50 as the New York Stock Exchange reacted to thenews, while Liberty Media shares climbed 2 cents to $18.17 in early Nasdaqtrading
"This transaction furthers our strategy of converting investments intostrategic operating businesses that have synergies with our current companies,"Liberty chief executive officer Gregory B Maffei said.
"IDT Entertainment and Starz is a great combination.We have appreciatedour long friendship with IDT and look forward to the next phase of ourpartnership."
"This is a union of two companies that have complementary strengths and sharethe entrepreneurial spirit essential for success in the rapidly changing worldof video production and distribution," SEG president and chief executiveofficer Robert B Clasen added.
"With the addition of the dynamic, creative team at IDT Entertainment, ourcompany will be positioned to capitalise fully on the opportunities afforded bythe new era of content."
The parties expect the deal to close within the next three months, when LibertyMedia will pay IDT $186m in cash, and all of Liberty Media's equity interestsin IDT and its subsidiaries.
This includes approximately 17.2million shares of IDT's Class B common stockand Liberty Media's approximate 5% interest in IDT Telecom. IDT will beentitled to receive additional consideration from Liberty based upon theappreciation in value of IDT Entertainment over the five year period followingclosing.