John Malone’s Liberty Global plans to set up a tracking stock for its Latin American and Caribbean subsidiaries which will effectively split the cable giant into two “pure-play” media stocks.
The Liberty Latin America and Caribbean (LiLAC) group…
John Malone’s Liberty Global plans to set up a tracking stock for its Latin American and Caribbean subsidiaries which will effectively split the cable giant into two “pure-play” media stocks.
The Liberty Latin America and Caribbean (LiLAC) group will initially receive Liberty’s 100% interests in VTR GlobalCom and VTR Wireless as well as its 60% interest in Liberty Cablevision of Puerto Rico.
Liberty Global CEO Mike Fries commented: “This structure will enable us to retain the advantages of doing business as a single company, including the benefits of being able to leverage the expertise of our broader management team, our technology development programme and our overall economies of scale.
“At the same time, we will be creating “pure-play” European and Latin American equities that we believe will be attractive to investors.”
Tracking stocks are equity offerings, whose price is based on the operations of the company’s fully-owned subsidiary being tracked and are aimed at maximising profits from a high-growth division by separating it from its parent company.
Under the plan, record holders of Liberty Global’s ordinary shares would receive one LiLAC class A, B or C ordinary share for each 20 ordinary shares of Liberty Global class A, B or C, respectively, held by them.
The process of creating and distributing the tracking shares is due to complete in five months, subject to regulatory and shareholders approvals.
Liberty’s Latin American team and local operating teams in Chile and Puerto Rico will run the LiLAC operations, under the supervision of the company’s executive team.
The London-headquartered triple-play player has operations in 14 countries and 24 million subscribers as of 30 June 2014. Its subsidiaries include Virgin Media, UPC, Unitymedia Kabel BW, Telenet and VTR.
Liberty is also close to finalising the acquisition of Dutch cableco Ziggo after the deal was cleared by the European Commission earlier this month.
