John Malone
John Malone’s Liberty Media Corp. said Thursday that its board of directors has authorized management to pursue a split-off of the Atlanta Braves and its associated real estate development project and the creation of a new Liberty Live Group tracking stock, which will house the company’s 31 percent stake in Live Nation Entertainment, among other things.
Tracking stocks are designed to let investors track specific businesses that are part of a larger company. Liberty has used such tracking stocks in the past in the hopes of highlighting the performance and value of parts of its wide-ranging portfolio of assets.
“We plan to split off the Atlanta Braves into an asset-backed stock to better highlight its strong value. Additionally, post-split-off, we plan to recapitalize all of Liberty Media’s remaining common stock into three tracking stock groups,” said Greg Maffei, Liberty Media president and CEO. “These actions will provide greater investor choice and enable targeted investment and capital-raising through more focused currencies, while maintaining an optimal capital structure for Liberty Media and preserving optionality with respect to our subsidiary SiriusXM and our Live Nation stake.”
The split-off will be accomplished “through the redemption of Liberty Media’s existing Liberty Braves common stock in exchange for common stock of a newly formed company to be called Atlanta Braves Holdings Inc.,” the firm said. “Atlanta Braves Holdings would hold all of the businesses, assets and liabilities currently attributed to the Braves Group, including Braves Holdings LLC, which is the direct or indirect owner and operator of the Atlanta Braves Major League Baseball Club, certain assets and liabilities associated with the Atlanta Braves’ stadium and mixed-use development project, The Battery Atlanta, and corporate cash.” In connection with the Split-Off, Liberty Media would redeem each outstanding share of its Series A, Series B and Series C Liberty Braves common stock for one share of the corresponding series of common stock of Atlanta Braves Holdings. As a result of the Split-Off, Liberty Media and Atlanta Braves Holdings would be separate publicly traded companies. It is expected that the intergroup interests in the Braves Group held by Liberty Media’s existing Liberty SiriusXM Group and Formula One Group would be settled and extinguished in connection with the Split-Off in a manner to be determined.”
Following the completion of the split-off, Liberty Media wants to create a new tracking stock group, the Liberty Live Group. It would then have three tracking stocks: the Liberty SiriusXM Group, Formula One Group and the Liberty Live Group. The company said the third one would include “its interest in Live Nation Entertainment Inc., corporate cash, certain public and private assets currently attributed to the Formula One Group, Liberty Media’s 0.50 percent Live Nation exchangeable senior debentures due 2050, margin loan obligations incurred by its wholly owned special purpose subsidiary, which are secured by shares of common stock of Live Nation Entertainment Inc., together with other assets as may be determined from time to time by Liberty Media.”
Liberty Media said it expects to complete the split-off and the tracking stock reclassification in the first half of 2023.
This article was originally published by The Hollywood Reporter.
Liberty Media Acquisition Corp., a special purpose acquisition company (SPAC) launched by John Malone’s Liberty Media a couple of years ago in hopes of finding at least one takeover target, has taken a key step towards closing down the financial vehicle.
On Monday, a virtual special meeting of stockholders voted in favor of the move by approving updates to its certificate of incorporation, which allow it “to unwind and redeem all of its outstanding public shares prior to Dec. 30,” which is “in advance of the contractual termination date of Jan. 26, 2023.”
Liberty Media president and CEO Greg Maffei told the online meeting that his company — which owns the Atlanta Braves and the Formula One race car circuit among other media and entertainment assets — looked at around 140 companies in all as potential acquisitions, without identifying who they were. He added a picky Liberty Media saw no targets worth pursuing for a merger.
Maffei added Liberty Media had been working amid an industry backdrop where financial markets had turned down. That made financing any potential transaction more difficult and jumping through regulatory hurdles for a time extension to work out taxation issues more challenging.
“Frankly, getting an extension wasn’t worth it, given we had nothing on the table that was attractive enough for us to take us look,” Maffei told investors about the decision to wind up the SPAC.
SPACs, or “blank check companies,” have been a popular vehicle in recent years, including for former top media executives, including James Murdoch and former Walt Disney executives Tom Staggs and Kevin Mayer, to raise cash and hunt for acquisitions. But stock market volatility, macroeconomic uncertainty and the disappointing performance of some SPACs, along with other factors have led to questions about the outlook for SPACs.
Liberty Media Acquisition (LMAC) had announced the special meeting in October, detailing the challenges of its management team, led by Maffei, in finding a suitable merger deal.
“Since its IPO on Jan. 23, 2021, LMAC’s management team has employed a broad set of search criteria for potential target business combinations and evaluated more than 140 such target companies,” the firm said back then. “In evaluating these businesses, management remained focused on finding fair valuations amid volatile market conditions. LMAC’s management has observed what it believes were high valuations in 2021, a declining IPO market in 2022 and significant public and private market volatility, which have prevented the company from securing an opportunity that it believes will offer a compelling return on investment for its stockholders. In light of these circumstances, LMAC has determined that it is not feasible to complete an initial business combination (or enter into an agreement in principle with respect to an initial business combination) by Jan. 26, 2023.”
LMAC also noted “recent changes in U.S. tax law” that “could create corporate-level tax liabilities in connection with stockholder redemptions following year-end.”
This article was originally published by The Hollywood Reporter.
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