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MEMORANDUM <br /> 0 August 9, 1996 <br /> Page 9 <br /> If the purchase price is unreasonably high, the Authority should consider whether sufficient assets <br /> will be committed to operate and upgrade the systems to provide quality service to the subscribers <br /> in the future. Subsequent communications from counsel for US West indicates the apportioned <br /> purchase price paid by US West for the previous Meredith/now Continental systems will be <br /> roughly what Continental paid for the Meredith systems. No further information is given <br /> regarding the purchase price of the Hudson/North Hudson or South Washington County systems. <br /> Another concern with the financial aspects of the merger transaction is its impact on the <br /> financial stability of the parties. Standard & Poor's has included both Continental and US West <br /> on its CreditWatch and may downgrade the ranking for the corporations' securities. This <br /> • indicates merger s that the financial community believes the will have a negative impact on the <br /> financial health of US West. <br /> Fifth, there is a question whether this transaction will be completed. Counsel for US West <br /> confirmed public information that the merger will not be finalized if US West stock is not trading <br /> between $20 and $28 per share. It is quite possible that the stock will not be trading in the target <br /> range at the time of closing. Further, the Wall Street Journal reported on July 29, 1996, that US <br /> West, Inc. and Continental have the option to delay the merger without restructuring the <br /> transaction. <br /> Finally, if US West is granted the temporary waiver it is requesting of the FCC, it will be <br /> required to divest itself of the cable systems within 18 months of the merger. This is particularly <br /> ()troubling when the transfer coincides with the franchise renewal process. <br />