Daily Management Review

Liberty Media, Liberty Interactive to be Restructured by John Malone


11/12/2015




Liberty Media, Liberty Interactive to be Restructured by John Malone
Taking help of tracking stocks and spinoffs, media mogul John Malone, known for striking complex deals and running companies with intricate structures, is restructuring two companies he controls.

Spin-off of some of the business of Liberty Interactive Corp along with its 18 percent stake in online travel company Expedia Inc  into two newly-formed units - CommerceHub Inc and Liberty Expedia Holdings Inc was announced recently.
 
Liberty Interactive Corp mainly houses Malone's e-commerce interests.
 
QVC Group, the home-shopping business, and Liberty Ventures Group, the cable assets are the two tracking sticks that Liberty Interactive itself is structured into.
 
The spun off stocks will be distributed to Liberty Ventures Group shareholders.
 
The shares of Liberty Media Corp would be reclassified separately into three new tracking stock groups.  Liberty Media Corp was spun off from Liberty Interactive in 2011.
 
A tracking stock is a type of common stock that "tracks" or depends on the financial performance of a specific business unit or operating division of a company rather than the operations of a company as a whole.
 
The Atlanta Braves baseball holdings would be tracked by one tracking stock that will be designated as the Liberty Braves Group.
 
Ownership in stakes in Time Warner, Viacom and Live Nation would be tracked by the second tracking stock - Liberty Media Group. The Liberty Sirius Group will track its unit Sirius XM Holdings Inc.
 
"The move is positive and hints at more to come especially with the Sirius tracker," Robert Routh, an analyst at FBN Securities said.
 
"I don't see more trackers created but do think a deal with Sirius XM as well as Expedia is likely in the works as well as a combination of Liberty Broadband Corp with Liberty Interactive in the future," he said.
 
The tracking stock was brought to vogue by Dell in October when it struck a $67 billion deal for EMC Corp. It added a tracking stock to track the value of VMware, which is 80 percent owned by EMC.
 
Several companies including Liberty Broadband and Liberty TripAdvisor Holdings Inc had been spun off in the past by Malone who is known as the "King of Cable" for buying and selling cable and media companies for decades.
 
Liberty Media's tracking stocks and the companies spun off from Liberty Interactive will trade separately on the Nasdaq. The companies said that the spinoffs and the creation of the new tracking stocks is expected to occur in the first half of 2016.
 
(Source:www.reuters.com) 






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