John Malone’s Liberty Media Corp has started the process of spinning off its cable assets through a stock dividend to its shareholders to form a new listed company called Liberty Broadband. Liberty Broadband, in a regulatory filing, said on Friday the stock dividend would be worth up to $4.8 billion and Malone would retain a voting interest of 47.3%, Reuters reported.
Liberty Media intends to offer its shareholders one share in the spun-off company for every four shares held, Liberty Broadband said. Berkshire Hathaway and Comcast are among Liberty Media’s top shareholders.
Liberty Broadband will house Liberty’s stake in Charter Communications, investments in Time Warner Cable and location technology company True Position Technologies.
The spin-off enables Liberty to eventually sell the asset but disadvantages include lengthy holding periods to keep the transaction tax efficient, Macquarie Research analysts wrote in a note.
The plan, first announced on 5/8, is similar to how Liberty spun off television and movie channel Starz last year. The complicated stock structure was designed to be tax efficient, said the story.