|
|
|
ONLINE FEATURES
Book Reviews
BW Video
Columnists
Interactive Gallery
Newsletters
Past Covers
Philanthropy
Podcasts
Special Reports
BLOGS
Auto Beat
Bangalore Tigers
Blogspotting
Brand New Day
Byte of the Apple
Economics Unbound
Eye on Asia
Fine On Media
Green Biz
Hot Property
Investing Insights
Management IQ
NEXT: Innovation
NussbaumOnDesign
Tech Beat
Working Parents
TECHNOLOGY
J.D. Power Ratings
Product Reviews
Tech Stats
Wildstrom: Tech Maven
AUTOS
Home Page
Auto Reviews
Classic Cars
Car Care & Safety
Hybrids
INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads |  |
DECEMBER 12, 2005
Liberating Liberty's Value  Liberty Media (L
) (L), controlled by cable mogul John Malone, is attracting an eager crowd of value players. They see Malone's plan -- to unlock the value of Liberty's assets by splitting them up -- as a big winner that could lead to a deal with News Corp. Liberty will create a tracking stock called Liberty Interactive, to include its wholly owned shopping network QVC, Liberty's 20% stake in IAC/InterActiveCorp (IACID
), and Expedia. Malone hasn't said when the tracking stock will be launched. Popular in the late 1990s, tracking stocks can free assets that have been submerged in the parent company to appreciate separately. So the split will add to Liberty Media's overall value, figures Steve Rogé of Rogé Partners Fund. Investors who own Liberty stock, now trading at 7.68 a share, will get a proportionate share of the tracking stock. The rest of Liberty's holdings, including its 100%-owned movie channels Starz and Encore, its 17% in News Corp. (NWS
), plus 4% in Time Warner (TWX
), will be lumped together in an entity called Liberty Capital. Rogé believes dividing Liberty Media is a prelude to striking a deal with Rupert Murdoch, who controls News Corp., on Liberty's stake in News. When asked during a recent conference call if he and Murdoch were in talks, Malone replied: "We're talking all the time." Any deal will be a big plus for Liberty, Rogé says. Malone could either sell Liberty Capital to News or merge with it, he says. He puts Liberty's breakup value at 14 a share. "A major deal with News is inevitable," says Ted Henderson of securities firm Stifel, Nicolaus. Michael Kupinski of A.G. Edwards (AGE
) rates Liber-ty a buy, noting it trades below its net asset value of $12.85 a share. A NewsCorp. spokesman didn't return a call for comment.
Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.  By Gene G. Marcial
BW MALL
SPONSORED LINKS
Get BusinessWeek directly on your desktop with our RSS feeds.
Buy a link now! Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
 Copyright 2005, by The McGraw-Hill Companies Inc. All rights reserved.Terms of Use | Privacy Notice |
Printer-Friendly Version