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Technology Stocks : THE NEW LIBERTY MEDIA GROUP (NYSE: LMG.A and LMG.B)

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To: Jill Collins who started this subject	11/15/2000 5:59:48 PM
From: Glenn Petersen	of 375

Malone to be set free: dailynews.yahoo.com Wednesday November 15 5:01 PM ET AT&T Says to Spin Off Liberty Media NEW YORK (Reuters) - AT&T Corp. said on Wednesday it would spin off the Liberty Media Group (NYSE:LMGa - news) television programming unit it acquired through its acquisition of Tele-Communications Inc. in a move to reduce regulatory concerns over its cable television holdings. AT&T (NYSE:T - news), telephone and cable television company that plans to split into four separately traded companies, said the spin off also could help it comply with the conditions set by Federal Communications Commission (news - web sites) on its recent $50 billion acquisition of MediaOne Group. AT&T expects to convert the Liberty Media tracking stock into an asset-based security and launch Liberty Media Group as an independent, publicly traded company in the second quarter of 2001. The new security would be issued to holders of Liberty Media tracking stock in exchange for their shares of Liberty Media tracking stock. The company said the spin off is subject to a favorable tax ruling. John Malone, the head of Liberty Media, had been pushing for the separation of Liberty Media and AT&T, but complicated tax issues prevented a quick break. Because AT&T acquired Liberty Media as part of last year's tax-free acquisition of Tele-Communications Inc., it would have to pay some taxes on the deal if it sells Liberty Media before the spring of 2001. The tax penalty would be triggered unless AT&T could convince the Internal Revenue Service (news - web sites) that it had a material business reason for the sale. AT&T said the spin off ``is consistent with the rationale behind the company's recent decision to restructure into four companies.'' AT&T has long said it wants to be a ``pipes'' company that transmits many types of communications services, rather than being a content developer. Programming company Liberty Media, which holds interests in E! Entertainment Television and Courtroom Television Network, never meshed with that strategy. Analysts have long suspected that AT&T would spin off Liberty Media once the two-year tax restriction lifted. While the spin off may raise several tax questions, it could help AT&T satisfy the conditions placed on its June acquisition of MediaOne. As a condition of approving the deal, the FCC required the company to shed some of its cable subscribers or investments. AT&T had three options: divesting its 25.5 percent interest in the Time Warner Entertainment (TWE) partnership with Time Warner Inc. (NYSE:TWX - news); shedding programming interests including Liberty Media and others; or selling interests in other cable systems serving more than 9.7 million subscribers. AT&T said the spin off would allow Liberty Media to raise capital on its own, use its stock as currency in acquiring or partnering with other companies and help the public markets to better value Liberty Media. The split also would ease the competitive and conflict of interest concerns that arise from the differing business directions of AT&T and Liberty Media, ATT said.

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