In an indication of how much Bill Gates wants to be a major player in cable TV, his Microsoft Corp. attempted to engineer the secret purchase of close to a 20% voting interest in Tele-Communications Inc. earlier this year.
The attempt, at the time done without TCI's knowledge, has unleashed a lawsuit and drawn the wrath of TCI Chairman-CEO John Malone.
"What angered me about it was the backdoor nature of the attempt," Mr. Malone told Advertising Age. "If Bill's interested in our company, he should come in the front door."
The deal was undertaken in June. After TCI founder Bob Magness died, his sons Kim and Gary announced they were selling 32 million shares of TCI, including supervoting shares that have 10 times the voting power of ordinary TCI stock. After a late, higher offer--reported this month to be from Comcast Corp., the cable company Microsoft earlier bought into for $1 billion--was made, the executors of the Magness estate still sold the stock to TCI for $16.52 a share, or $529 million, claiming the other offer had come in too late.
Since then, TCI stock--like most cable stocks--has enjoyed a significant run-up in the market; it's now hovering in the $20 to $25 range.
Kim and Gary Magness this fall filed suit to invalidate the deal.
Neither Ralph Roberts nor Brian Roberts, Comcast chairman and president, respectively, was available for comment; a spokeswoman for Microsoft declined to comment. But one executive with knowledge of the situation said the Roberts' explanation for submitting the bid was a "last-minute call from Microsoft saying Microsoft was going ahead with the bid regardless of Comcast's participation, and that [the Roberts'] felt they could look after [Mr.] Malone's interest if they did participate."
He added: "I don't know if [Mr.] Malone bought it."
Copyright December 1997, Crain Communications Inc.