Maffei’s statement acknowledges a frequent investor complaint about Liberty Media – that its corporate structure is complicated, and its value is hard to evaluate because it’s a so-called tracking stock, and not an asset-backed stock.
The spinoff will free up capital for John Malone, an inveterate deal-maker, to play with.
Liberty Starz owns a chunk of Starz Entertainment, while Liberty Capital has an interest in the Atlanta Braves, Sirius XM Radio, Time Warner, Time Warner Cable, and Live Nation Entertainment. Liberty Interactive, meanwhile, owns stock in QVC and Expedia, among other interests.
Liberty Media said it plans to spin off Liberty Capital and Liberty Starz into a new company – at the moment referred to as Newco – sometime late this year or early next.
All the outstanding shares of Liberty Capital tracking stock and Liberty Starz tracking stock in exchange will be redeemed for shares in Newco. After the redemption, Newco and Liberty will be separate public companies.
Liberty’s chief executive, Greg Maffei said, “An asset-backed Liberty Interactive will provide better transparency on Liberty’s operating businesses, enable more efficient capital raising, and permit us to better pursue our strategic objectives, including acquisitions using stock. We also believe the split-off will be positive for the long-term credit outlook at Liberty Interactive.”