Liberty Media Says It Will Spin Off Starz

The change will turn Starz into a separate, publicly traded company. That should “provide better transparency on the Starz operating business” and “optimize the Starz capital structure,” Liberty Media CEO Greg Maffei says this morning. In addition, it could become easier for Liberty and Starz to use their shares for acquisitions — even as it preserves for Liberty “all our options with respect to Sirius XM and Live Nation,” companies in which it has substantial investments. Liberty investors will receive shares of Starz as a dividend. The new company will include all of Starz’ assets as well as $1.5B in debt and “an undetermined amount of cash.” The transaction, expected to close late this year, is designed to be tax free — a key consideration in deals by Liberty Chairman John Malone — but is contingent on a letter from the IRS verifying that fact. Although it will need the usual approval by anti-trust officials, it will not require a stock holder vote. (more…)

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