Exhibit A
FOR IMMEDIATE RELEASE
Friday, March 15, 1996
For Information Contact:
David Morris, GCI, 907.229.5941
Bonnie Bernholz, 907.561.4488
GCI TO ACQUIRE THREE LEADING ALASKA CABLE COMPANIES
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ANCHORAGE, AK - General Communication, Inc. (GCI) announced today it
has signed three letters of intent to acquire three Alaska cable companies that
offer cable television service to more than 101,000 subscribers serving 74
percent of households throughout the state.
Ron Duncan, president of GCI said GCI will acquire Prime Cable of
Alaska, Alaska Cablevision, Inc. of Kirkland, Washington and Alaskan Cable
Network. Prime Cable operates the state's largest cable television system
including stations in Anchorage, Bethel, Kenai and Soldotna. Alaska Cablevision
owns and operates cable stations in Petersburg, Wrangell, Cordova, Valdez,
Kodiak, Homer, Seward, Nome and Kotzebue. Jake Kent Cooke's wholly owned Alaskan
Cable Network operates stations in Fairbanks, Juneau, Ketchikan and Sitka.
The total purchase price is $280.7 million. According to terms of the
agreements, GCI will issue 16.3 million shares of Class A Common stock to the
owners of the three cable companies valued at $105.7 million. The balance of the
purchase will be provided by approximately $175 million of bank financing.
Additional capital will be provided from the sale of 2 million shares of GCI
Class A Common Stock to MCI Telecommunications Corporation for $6.50 per share.
In making the announcement, Duncan said three separate letters of
intent were executed yesterday. The transaction should be finalized in about a
month at which time GCI will apply to the Alaska Public Utilities Commission
(APUC) to transfer the licenses of the cable companies. Once all regulatory
approvals are granted, the cable companies will be consolidated into a single
organization owned by GCI.
Duncan said the recently passed Telecommunications Act of 1996 allows
providers to expand their current level of services by entering into new,
previously protected business areas. Among other efficiencies, the new federal
legislation allows
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open competition among local telephone providers, long distance carriers and
cable television companies.
"The world of telecommunications is rapidly changing, and the
once-distinct lines drawn between telephone and cable services are beginning to
merge," Duncan said. "This acquisition allows us to integrate cable services and
enables us to bring more information not only to more customers, but in a manner
that is quicker, more efficient and more cost effective than ever before."
Duncan said the purchase will consolidate operations and offer a
platform for developing new customer products and services over the next two
years.
"We at Prime Cable of Alaska view the merger with GCI as a positive
step toward providing additional opportunities to our employees and ultimately
providing technological enhancements and services to our customers," said Marty
Robinson, vice president and general manager of Prime Cable of Alaska. "We
believe this merger is a clear indication of both Prime Cable and GCI's
continued commitment to our customers and to the state of Alaska."
Mike Roberge, Alaska Cablevision president said, "This is much more
than an acquisition. From our cable perspective, the new GCI venture will bring
much needed scale, as well as new operating efficiencies to our operations.
Alaska Cablevision welcomes the opportunities afforded in folding our cable
operations in with that of Prime Cable and Alaskan Cable Network. We can only
view this as great news for our customers, our employees and our shareholders."
Jerry Parker, regional manager of Alaskan Cable Network, said, "I think
the consolidation of GCI and the three largest cable television companies in
Alaska will be of tremendous advantage as communication needs continue to
expand, and we look forward in joining this exciting new venture."
GCI is an Alaska-based telecommunications company. Founded in 1979, GCI
began offering long distance telephone service in November 1982. During GCI's
nearly 13 years of service, it has grown from a small interstate long distance
company to one that serves more than 90,000 customers.
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FINANCIAL TERMS OF THE ACQUISITION
Terms
Cash $ 72,000,000
Assumption of Debt $103,000,000
Convertible Note $ 10,000,000
(convertible into 1.538
million shares of GCI
Class A Common Stock)
Issuance of 14,723,077 Shares of
GCI Class A Common Stock valued
at $6.50 per share $ 95,700,000
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Total Acquisition Price $280,700,000
Other
- - MCI to acquire 2,000,000 shares of GCI Class A Common Stock at a price of
$6.50 per share
- - Carrier contracts for the carriage of MCI traffic by GCI and the carriage of
GCI traffic by MCI extended for three years through March 31, 2001
- - Major GCI shareholders after closing of transactions and conversion of
convertible note:
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Percentage of Outstanding Shares
MCI .................................................. 23 percent
Prime Group .......................................... 28 percent
GCI Employees/Management ............................. 9 percent
Jack Kent Cooke ...................................... 7 percent
Rock Group ........................................... 4 percent
Wellington Management Co. ............................ 3 percent
Others ............................................... 26 percent
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Total ................................................ 100 percent
LOCATIONS:
Prime Cable Alaskan Cable Network Alaska Cablevision
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Anchorage Area Fairbanks Petersburg
Bethel Juneau Wrangell
Kenai Ketchikan Cordova
Soldotna Sitka Valdez
Kodiak
Nome
Kotzebue
Homer
Seward
* Number of homes passed/subscribers: 160,000/101,000
1995 Revenues
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GCI $129,000,000
Cable Companies $ 54,000,000
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Total $183,000,000
Estimated operating cash flow of cable companies at closing: $29,400,000
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Number of Employees
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GCI 430
Cable Companies 220
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Total 650
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