Liberty Interactive Plans Two New Trackers


Liberty Interactive said Thursday that it will split into two separate tracking stocks - Liberty Interactive and Liberty Ventures - in an effort to unlock further value in the assets.
Liberty Interactive will include home shopping channel QVC, its eCommerce unit, its 34% stake in HSN Inc., about $500 million in cash and about $5 billion in debt. Liberty Ventures will include interests in Expedia, TripAdvisor, Time Warner, Time Warner Cable, AOL, Interval Leisure Group, and Liberty's green-energy investments, $1.25 billion of cash, and about $3 billion in debt.
"We expect this recapitalization to highlight each tracking stock's operations and financial aspects of the attributed assets, provide greater investor choice, and raise capital while maintaining an optimal capital and tax efficient structure for Liberty," Liberty CEO Greg Maffei said in a statement.
Liberty expects the split to occur in the summer.
Liberty stockholders will receive one share of the corresponding series of Liberty Interactive group tracking stock for each share of series A or series B Liberty common stock they own and one share of the corresponding series of Liberty Ventures group tracking stock for every 20 shares of series A or series B Liberty common stock they own. In addition, stockholders will also receive a subscription right to acquire one additional series A or series B share for every three shares of series A or three shares of series B Liberty Ventures tracking stock they receive in the recapitalization.
Liberty is no stranger to tracking stocks, having launched several trackers over the years to unlock asset value.
The news comes after Liberty reported mixed fourth quarter results. Revenue rose 5% and adjusted OIBDA rising 9% at QVC, but its Starz premium channel saw adjusted OIBDA decline 15% in the quarter. Revenue rose 8% for the period at Starz, and subscriber were up by about 8%.