Liberty Media to Split Into Three Tracking Stocks

Malone Firm Dividing Into Atlanta Braves, Media and Sirius Groups
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Liberty Media said it has authorized its board of directors to split the company into three tracking stocks, separating its media, sports and satellite radio holdings.

The three trackers would be Liberty Braves Group, including its interests in the Atlanta Braves Major League Baseball team; Liberty Sirius Group, containing its holdings in satellite radio giant Sirius XM Holdings, and Liberty Media Group, including Live Nation and its minority interests in media companies Viacom and Time Warner Inc.

Tracking stocks are a common vehicle for Liberty (which is holding an investor gathering in New York City later today) to unlock the value of its holdings. In the past it has created trackers for its holdings in QVC Group and its Latin American cable holdings (LiLAC Group).

As part of the latest deal, holders of Liberty’s Series A, Series B and Series C common stock would receive shares of the corresponding series of Liberty Braves tracking stock, Liberty Media tracking stock and Liberty Sirius tracking stock for each share of Liberty’s common stock held by them.

After creating the new tracking stocks, Liberty would distribute to holders of its Liberty Braves tracking stock subscription rights to acquire shares of Series C Liberty Braves tracking stock. The record dates, distribution dates, and distribution ratios for the creation of the new tracking stocks and the distribution of subscription rights will be announced at a later date.

“We expect this recapitalization to highlight each tracking stock group’s operations, and the financial performance of its attributed assets, provide greater investor choice, and enable targeted capital raising while maintaining an optimal capital structure for Liberty,” Liberty CEO Greg Maffei said in a release.

Liberty intends to attribute to the Liberty Braves Group its subsidiary the Braves Holdings, LLC (which indirectly owns the Atlanta Braves and certain assets and liabilities associated with the Atlanta Braves’ stadium and mixed use development project, cash and a note obligation in the amount of approximately $165 million from the Liberty Braves Group to the Liberty Media Group.

Liberty intends to attribute to the Liberty Sirius Group its subsidiary Sirius XM Holdings, Inc., cash and its $250 million margin loan obligation.

Liberty said it intends to attribute to the Liberty Media Group all of the businesses, assets and liabilities of Liberty other than those specifically attributed to the Liberty Braves Group or the Liberty Sirius Group, including Liberty’s interests in Live Nation Entertainment, Inc., minority equity investments in Time Warner Inc. and Viacom, any recovery received in connection with the Vivendi lawsuit and cash, as well as Liberty’s 1.375% Cash Convertible Notes due 2023 and the Intergroup Note. Following the creation of the tracking stocks, the Liberty Media Group will also hold an approximate 20% inter-group interest in the Liberty Braves Group.