John Malone’s Liberty Media is adding a third tracking stock in a bid to clarify its assets for investors.
The new issue, Liberty Entertainment, would encompass a recent acquisition from News Corp.: a roughly 38.5% controlling stake in DirecTV, three regional sports networks and $588 million in cash. That transaction is expected to close this year.
Also included in the new tracking stock will be interests in Starz Entertainment, Starz Media and other assets attributed to the Liberty Capital Group, an existing tracking stock. Liberty expects that the new group would also be attributed about $550 million of Liberty Media’s publicly traded exchangeable debt.
The Denver-based conglom made the announcement along with posting so-so quarterly earnings. Net income reached $1 billion in the quarter ended June 30, up from $478 million in the second quarter a year ago. Revenue rose 10% to $2.2 billion.
The creation of Liberty Entertainment “should achieve two purposes,” prexy-CEO Greg Maffei said. “First, it will create a focused distribution and programming business in Liberty Entertainment (that) should increase shareholder value and provide a strong currency that will increase our strategic flexibility. Second, the new Liberty Capital group will focus the complexity that contributes to our trading discount into a single, smaller group of assets that can be more effectively simplified over time.”
Liberty Capital shares inched up 3% to $115.27. Liberty Interactive slumped 2% to $19.82.