By: Justin Bachman, AP Business Writer
(AP) Microsoft Corp. chairman Bill Gates has purchased a small stake in Cox Communications Inc. for about $500 million.
Gates’ personal investment firm, Cascade Investment LLC, bought 8.1 million shares of Cox, a major cable television and high-speed Internet provider, for $499.5 million on Oct. 29, according to a filing Wednesday with the Securities and Exchange Commission.
The Bill and Melinda Gates Foundation purchased an additional 5.4 million shares the same day. The 13.5 million shares represent about 2% of Cox Communications.
The proceeds will be used to retire debt “and also to put us in a position where we’re able to pursue future growth opportunities,” said Brian Farley, a spokesman for Cox’s parent, Cox Enterprises Inc. “We like to have a strong balance sheet.”
Gates, whose net worth is more than $50 billion, will have no operational or management role in the company.
“That was not part of the transaction,” Cox Communications spokeswoman Laura Oberhelman said. “He’s just a long-term investor who really believes in broadband.”
The purchase puts Gates in the company of another cable mogul he knows well — Microsoft co-founder Paul Allen, owner and chairman of Charter Communications Inc., the country’s fourth-biggest cable operator.
Allen spent $4.5 billion in July 1998 to acquire control of St. Louis-based Charter, which he merged with his former cable enterprise. Allen remains the second-largest Microsoft shareholder, after Gates.
Atlanta-based Cox Communications is the nation’s fifth largest cable operator, with 6.2 million customers in 23 states.
With the sale, Cox Enterprises retains about 64% of the company. Cox Enterprises also operates radio and television stations, auto auctions and newspapers, including The Atlanta Journal-Constitution and Austin American-Statesman.
Shares of Cox Communications fell 23 cents to close at $37.40 Thursday on the New York Stock Exchange.