Teligent Inc. (Nasdaq: TGNT) confirmed Friday that it has raised $500 million in new capital to expand its buildout of local broadband networks across the country and around the world.
Shares closed Thursday at 48. The stock has been jagged since the company beat estimates in its second quarter.
The investor group, which is led by Microsoft Corp. (Nasdaq: MSFT) and private equity firm Hicks, Muse, Tate & Furst Inc., has been involved in several other communication related transactions. Other investors include Chase Capital Partners, DB Capital Partners and Olympus Partners. Microsoft CFO Greg Maffei said the investment endorses Teligent and Microsoft's shared vision of faster broadband pathways.
Microsoft and Hicks Muse each will invest $200 million in Teligent's convertible preferred stock. The conversion price of $57.50 per share represents a 28 percent premium over the previous five-day average closing price on the date the agreement was reached.
At closing, the private equity group will own approximately 14 percent of Teligent's outstanding common stock. Tom Hicks, Chairman and Chief Executive Officer of Hicks Muse, is nominated to become a member of Teligent's Board of Directors.
"This new capital will provide funding for Teligent's core business initiatives into 2001 and our initial expansion into international markets. In addition, we expect to work closely with Microsoft as we expand our data and Internet initiatives," said Teligent chief Alex J. Mandl in a company statement.