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Liberty to spin off Starz

by Lou Whiteman  |  Published August 8, 2012 at 11:15 AM
starz_227x128.jpgLiberty Media Corp., the holding company controlled by media mogul John Malone, said Wednesday, Aug. 8, it would split off pay television network Starz LLC and related assets in a tax-free spinoff to shareholders.

Starz, which operates various channels under the Starz and Encore brands, will become a separate publicly-listed entity with about $1.5 billion in debt. The company said that Starz and Encore reported 20.7 million and 34.2 million subscribers, respectively, at the end of the second quarter, generating a combined $403 million in sales in the quarter.

Liberty CEO Greg Maffei in a statement said that the spinoff would make Starz's operations more transparent, while providing Englewood, Colo.-based Liberty with increased liquidity. Maffei said that both companies would be better able to "pursue our strategic options, including creating two currencies that could be used to make aacquisitions."

Starz CEO Chris Albrecht called the stand-alone structure "the first step to unlocking the real potential growth opportunities for our business."

The deal is the latest in a long string of transactions for Malone, whose Liberty also owns the Atlanta Braves Major League Baseball franchise, significant interests in Sirius XM Radio Inc., Live Nation Entertainment Inc., and Barnes & Noble Inc., and minority equity investments in Time Warner Inc., Viacom Inc. and others.

But Liberty of late has been focused on simplifying its operation. The company last fall spun off Liberty Interactive, which housed ownership and equity interests in a broad range of video and online commerce businesses including QVC Inc., HSN Inc., Expedia Inc., Provide Commerce Inc., Backcountry.com Inc., Bodybuilding.com LLC and Evite.

In November Liberty's board voted to eliminate the company's two remaining tracking stocks. Liberty Starz, which included the assets that are now to be spun off, was one of those two trackers.

Shares of Liberty traded up 3 cents at market open Wednesday to $99.48.
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Tags: Liberty Media Corp. | restructuring | Starz LLC

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