Capital Markets

Liberty Media to Split Up

Chairman expects company to benefit, grab debt market opportunities.
Stephen TaubNovember 15, 2005

Liberty Media chairman John Malone plans to separate the company’s interactive assets from its financial assets. The move is designed to take advantage of future opportunities in the debt markets, says Malone, according to The Financial Times.

Malone says he cannot predict what those opportunities will be; however, he expects that in this increasing interest rate environment, leveraged businesses will be pressured by the higher cost of capital.

Also, the chairman says the divestiture is intended to give incoming chief executive officer Greg Maffei wider scope. In early November, Maffei left Oracle after just under five months as chief financial officer to join Liberty. In a joint telephone interview with Maffei, Malone told the paper: “Greg’s experience will be helpful in figuring out how to grow the interactive assets. But the real home run is in the capital company.”

Malone also announced that he would create a new tracking stock, called Liberty Interactive, which will include a number of assets, including QVC and Liberty’s investments in IAC/InterActiveCorp. and Expedia Inc.

In the past few years, some of Liberty Media’s divisions were spun off to boost the share price and simplify the company. Last year, Liberty Global was spun off.