Liberty Global Shuffles Japanese Assets

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Liberty Global, the international cable arm of Liberty Media, restructured its Japanese cable assets, boosting its ownership of Jupiter Telecommunications and rationalizing its stake in Japanese programmer Jupiter TV, which houses 70% of the Shop Channel and stakes in 19 thematic programming channels.

In a series of transactions with partner Sumitomo -- which has a 50% interest in Jupiter TV -- Jupiter TV will be split into two companies. LGI will exchange its interest in Shop Channel for $867 million of Sumitomo shares. The company holding the thematic channels will then be merged into Jupiter Telecommunications (J-Com), with LGI and Sumitomo collectively receiving about $433 million in J-Com shares. LGI will receive about $217 million in J-Com shares, increasing its stake from 36.5% to 37.5% of J-Com.

LGI and Sumitomo are partners in LGI/Sumisho Super Media, a holding company formed in 2004 that owns a controlling interest in J-Com. Sumitomo owns a minority interest in Super Media.

As a result, J-Com will own interests in several different programming assets including Movie Plus, Golf Network, LaLa TV, J Sports Broadcasting, Discovery Channel Japan, Animal Planet Japan and Reality TV Japan, and it will become the 100% owner of Jupiter VOD, the content supplier for J-Com’s video-on-demand service.

This transaction is expected to close in the third quarter.

“From our perspective, we will tax-efficiently rationalize our minority interest in Shop Channel at an attractive valuation,” LGI CEO Mike Fries said in a prepared statement. “Just as important, the transfer of 19 leading thematic programming channels to J-Com strengthens its strategic position in the Japanese pay TV market and increases Liberty Global’s consolidated ownership in Japan’s leading broadband-communications provider.”

JPMorgan acted as sole adviser to Liberty Global.

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