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Liberty frees Net assets
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April 7, 1999: 4:45 a.m. ET
Cable giant bundles new media operation into TCI Music, prepares for deals
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LONDON (CNNfn) - Liberty Media plans to transfer its Internet and interactive assets into TCI Music in a move designed to enhance the cable giant's deal-making prowess in the new media sector.
The venture will operate as Liberty Digital with assets of over $1 billion and trade under TCI's existing stock symbol.
TCI Music (TUNE) shares surged on the news, more than tripling from 8-3/8 to close Tuesday at 29-9/16.
TCI Music has focused on music and video programming since its acquisition by Liberty parent AT&T and has assets of around $400 million.
Liberty Digital was set up last August to coordinate Liberty's Internet business. Its head, cable veteran Lee Masters, will become chief executive of the reconfigured company.
"[We hope] to be to new media and the Internet what Liberty was for cable programing," Masters told The Wall Street Journal. He said TCI Music's stock would provide a "wonderful currency" for future transactions.
Liberty has acted as a tracking stock for AT&T, which acquired the company when it bought Tele-Communications Inc. The asset swap will further distance AT&T from the Liberty empire which is already being run at arms-length, according to the Journal report.
Liberty Media will receive 128.7 million new shares in TCI Music in exchange for the media assets, boosting its stake to 94 percent of outstanding stock. TCI will also assume $50 million in debt and receive a $50 million loan from Liberty.
Liberty's reshuffle follows its sale of Tuesday of a 50 percent stake in its Fox/Liberty cable network in exchange for an 8 percent stake in News Corp. (NWS).
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Liberty Media
TCI Music
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