Deutsche sees Liberty Broadband, Charter coming to merger agreement

Deutsche Bank says Liberty Broadband (LBRDA) announced a counter offer to a previous offer made by Charter Communications (CHTR) to merge the two companies. Charter’s initial offer was at an exchange ratio of 0.228, implying $75.61 for Liberty at Charter’s closing price of $331.62, the analyst tells investors in a research note. Liberty’s counter offer was at an exchange ratio of 0.29, implying $96.17 for Liberty shares, and included GCI in the offer. The firm believes GCI will ultimately be included in a merger agreement between the two companies because it is the actively traded business needed for a tax efficient transaction for Liberty shareholders. It estimates GCI represents $11.20 of equity value per Liberty share, which represents 54% of the difference between the two proposals. Deutsche expects the two parties will come to an agreement at an exchange ratio somewhere in between the two offers made, and that the merger agreement will include GCI.