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Malone Keeps Reins in Stock Sale

June 18, 1997|From Times Wire Services

NEW YORK — John Malone, head of Tele-Communications Inc., cut a deal Tuesday to keep control of the nation's biggest cable company while allowing the estate of its founder to cash out.

TCI said it will exchange Class B shares owned by the estate of Bob Magness--which have special voting power--for normal Class A shares. That keeps the voting power within TCI while allowing the estate to sell its shares. Merrill Lynch and Lehman Bros. then will buy Magness' Class A shares for $16.52 each.

Malone, who owns 29.9% of the voting stock, will retain his hold on the company as its largest individual shareholder as well as its CEO, while spending no money right away. He gets the right for two years to buy Magness' Class B shares back from TCI. Magness' 30.5 million Class B shares total 36.7% of TCI's voting stock.

Merrill and Lehman will hold the new Class A shares, including an additional 1.5 million the Magness estate will sell them, for up to two years, in which time TCI can buy them back for $16.52 each. That alleviates investors' concerns about Magness' shares being dumped onto the market any time soon. TCI will pay the brokerages interest while they hold the shares.

TCI's Class A shares rose 6.25 cents to $16.81 on Nasdaq.

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