Liberty Media eliminating tracking stocks


No longer will there be four Liberty Media stock symbols to track. The company is slimming down to two, eliminating the tracking stock structure for Liberty Starz.

“We are pleased to announce the combination of Liberty Starz and Liberty Capital into an asset-backed security,” said the announcement from Greg Maffei, Liberty President and CEO. “The board of directors determined this was the right move to increase the value for both Liberty Capital and Liberty Starz shareholders by eliminating the ‘tracker discount’, increasing liquidity in the stock and creating a stronger acquisition currency. In addition, we recently took advantage of the attractive debt markets to raise capital at Starz, and we have more opportunities to deploy it at a combined Liberty Media.”

Starz just completed a $1.5 billion senior secured credit facility, consisting of a $1 billion five-year revolving credit facility and a $500 million five-year term loan facility. The interest rate on the facility is at LIBOR + 175-275 basis points, based upon leverage, and Starz’s maximum leverage ratio covenant is 4.75x, decreasing to 4.25x after 24 months. The facility is secured by the membership interests of Starz LLC and its wholly owned subsidiary, Starz Entertainment LLC.

The fold-up of the tracking stock structure, set for November 28, will eliminate the two Liberty Starz tracking stocks: Class A “LSTZA; and Class B “LSTZB.” Each share will be converted into 0.88129 of a share of the same class of Liberty Capital common stock, which will continue to trade on Nasdaq. Those tickers are Class A “LCAPA”; and Class B “LCAPB.” Cash will be paid in lieu of fractional shares.

The Liberty Starz group currently includes Liberty Media’s interest in Starz LLC, while Liberty Capital group includes its subsidiaries – Atlanta National League Baseball Club Inc. and TruePosition Inc. – its interests in SiriusXM, Live Nation and Barnes & Noble; plus minority equity investments in Time Warner and Viacom.

RBR-TVBR observation: Liberty Media is still going to be pretty complicated, what with its assortment of 100% and less than 100% equity and debt stakes in various companies.