Liberty Media to Spin Off Its Overseas Cable Operations
("The new company will have more than 10 million subscribers, making it the largest single cable holding company outside the United States.")
By GERALDINE FABRIKANT
Published: March 15, 2004
New York Times
nytimes.com
The Liberty Media Corporation, the diversified American media company that is controlled by John Malone and owns stakes in cable television systems and programming companies, said yesterday that it would spin off its overseas cable operations into a separate, publicly traded company.
Mr. Malone, chairman and controlling shareholder of Liberty Media, said he would serve as chief executive of the new company, which will be called Liberty Media International and be based in Denver.
The new company will assume Liberty's 55 percent stake in the European cable operator UnitedGlobalCom, as well as 45 percent of Jupiter TeleCommunications, a Japanese cable company, along with some cable systems in Puerto Rico. The new company will have more than 10 million subscribers, making it the largest single cable holding company outside the United States.
The spinoff will grant current Liberty stockholders one share in the new company for every Liberty share already held.
Analysts see Mr. Malone's decision to take operating control of the new cable company as a signal that he wants to return to the cable television business, the industry in which he had built Tele-Communications Inc. into the United States' largest cable operator before agreeing to sell it to AT&T in 1998 for $31.8 billion in stock.
Cable is the business in which Mr. Malone "won his spurs," Matthew Harrigan, a cable analyst at Janco Partners, said yesterday.
Mr. Malone made his mark through a series of acquisitions of smaller cable systems that gave Tele-Communications Inc. enormous leverage both in buying hardware and in negotiating deals for programming.
"I absolutely see L.M.I. as the next T.C.I.," Mr. Malone said in a conference call with analysts yesterday. He pointed out that his family continued to have the bulk of its wealth in Liberty Media.
In 1993, Mr. Malone initially spun off Tele-Communications Inc.'s investments in cable programming as Liberty Media, and over the next decade, spun off and bought back Liberty several times. Liberty's holdings now include interests in a various of programmers including QVC, Discovery Communications and others. It also owns stock in major media companies including the News Corporation.
In recent years, however, Liberty's stock has not performed particularly well because it was viewed as a company that simply held minority stakes in other media properties. The decision to split the assets into two companies may help clarify it because it splits domestic programming from foreign programming.
Liberty's stock closed Friday at $11.72, up 4.18 percent on rumors of a deal. The shares were trading at $11.51 just before 2 p.m. yesterday in New York. |
