Liberty Global, following in the footsteps of its chairman John Malone’s other media holdings, said it will establish a tracking stock for its Latin American operations, effectively splitting the company into two pure play media stocks, one (Liberty Global) focusing on European cable and the other on its assets in Latin America and the Caribbean.
The Liberty Latin America and Caribbean (LiLAC) Group will initially include Liberty Global’s 100% interests in Chilean-based VTR GlobalCom SpA and VTR Wireless SpA, as well as its 60% interest in Liberty Cablevision of Puerto Rico LLC.
“The creation of a tracking stock will highlight the value of our well-positioned operations in Latin America and the Caribbean,” Liberty Global CEO Mike Fries said in a statement. “This structure will enable us to retain the advantages of doing business as a single company, including the benefits of being able to leverage the expertise of our broader management team, our technology development program and our overall economies of scale. At the same time, we will be creating “pure-play” European and Latin American equities that we believe will be attractive to investors.”
The tracking stock structure has been a common one for Malone’s Liberty Media – earlier this month Liberty Interactive completed the split of Liberty Interactive into two trackers – QVC Group which houses its interest in the QVC and HSN shopping channels and Liberty Ventures, housing its electronic commerce assets. The company also plans to spin its 26% interest in Charter Communications into the Liberty Broadband tracker next month.
Liberty Global said it expects to complete the LiLAC Group spins in about five months. Liberty Global is the largest cable operator in Europe with about 23 million customers. It has about 1.3 million customers in Chile and 276,000 in Puerto Rico.
In connection with the creation of the LiLAC Group tracking shares, record holders of Liberty Global’s ordinary shares would receive one LiLAC Group Class A, Class B or Class C ordinary share for each 20 ordinary shares of Liberty Global Class A, Class B or Class C, respectively, held by them. Liberty Global expects that the LiLAC tracking shares will trade under the symbols “LILA,” “LILAB” and “LILAK,” respectively, on the NASDAQ Global Select Market. All of Liberty Global’s businesses not attributed to the LiLAC Group will be attributed to the Liberty Global Group. The Liberty Global Group shares will continue to trade under our current symbols “LBTYA,” “LBTYB” and “LBTYK,” respectively, on the NASDAQ Global Select Market.