The focus of the transaction appears to be Teligent, a broadband fixed wireless company that has rapidly expanded its small and medium-sized business services over the past year. The Associated Group owns close to 41 percent of Teligent.
"The Associated transaction is a unique opportunity for Liberty," said Robert Bennett, Liberty Media CEO. "It allows us to obtain an attractive investment in the very exciting and rapidly growing business of Teligent."
The deal is the first hard communications-focused acquisition pursued by Liberty since it was acquired by AT&T as part of the Tele-Communications Incorporated merger earlier this year.
Liberty, which is technically a subsidiary of AT&T, trades independently. Malone and his board of directors retain a substantial amount of control over the group.
But the purchase gives AT&T another potential route into the local phone business, skirting the existing networks owned by the dominant local phone companies.
Teligent offers high-speed Internet and phone service in 26 markets through microwave wireless technology and expects to be in 40 markets by year's end. In the first quarter of 1999, the company had about $1.52 million in revenues, with total losses of about $108.1 million.
AT&T itself has its own wireless access system in trials, dubbed Project Angel, but Teligent's technology can provide much faster connections.
The Associated Group also owns a wireless positioning company called TruePosition, a stake in a Mexican cellular telephone company, and shares in a handful of radio stations.
Associated shareholders will get 0.62 Liberty Class A shares and 0.47 AT&T shares for each Associated class B share. Liberty also will take over about $187 million in Associated debt.
The deal is expected to close in early 2000.