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Liberty to Spin Off Businesses

March 16, 2004|From Reuters

Liberty Media Corp. on Monday said it would spin off its international businesses, worth about $9 billion, as it weighed deals with News Corp. as part of efforts to simplify the company's structure.

Liberty, which restructured operating divisions last year to make its reporting more transparent, said it was interested in selling parts of its portfolio, which included the top-rated Discovery network, to Rupert Murdoch's News Corp.

"There are assets that News Corp. has that Liberty finds very attractive and wouldn't mind owning directly," Chairman John Malone told analysts during a conference call. "And perhaps there are assets that Liberty has that News Corp. would find quite attractive over time."

No immediate deals were in the works, Malone said. "But you know, one can never tell," he added.

That partially explains why the cable veteran in January raised his News Corp. voting stake to 9.15%, second only to Chief Executive Murdoch's interest.

Those shares now give him the much-coveted equity to pull off such deals, Malone said.

He also said the spinoff of the international assets, expected to be completed by summer, was intended to be tax free to shareholders and would create a new publicly traded company on the Nasdaq market, called Liberty Media International Inc.

Malone would be the new company's CEO.

The news, aimed at addressing investors' chief concern over Liberty's arcane financial structure, failed to lift shares of the company in afternoon trading, weighed by marketwide fears from last week's train bombings in Spain. The shares fell 27 cents to $11.45 on the New York Stock Exchange.

Malone, a cable industry pioneer, has long held ambitions to create an international equivalent to the Tele-Communications cable television empire he built before selling it to AT&T Corp. in the 1990s.

The new firm would represent one of the largest cable operators outside the U.S., with 10 million video subscribers across Europe, Japan and Latin America.

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