Seeing Starz: New Details On Latest Liberty Spin Off Make Our Heads Hurt

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One thing about John Malone- if there’s a way to make a deal more complicated, he’ll find it. We’ve written in the past about the upcoming Starz spin, but now it’s finally here, and the company has issued a press release detailing what will happen. For those arriving late, Liberty Media Corporation(LMCA,LMCB) will be spinning itself off. That is, it will spin off all non-Starz assets, rename the new company Liberty Media Corporation, and then rename the parent company Starz. Got that? Good, because it only gets trickier(you may want to get a pen and paper).

First, the new Liberty Media will begin trading on a when-issued basis, but with different start dates for A and B shares.  Class A shares will begin trading on a when-issued basis under the ticker LMCAV on January 10. 2013. Class B shares will begin trading on the same basis under the ticker LMCBV one day later, on January 11,2013.  When-issued trading will be short-lived, however. The distribution of new Liberty shares will be to holders of record of Liberty common stock at 5:00 p.m., New York City time, on January 10, 2013. But, get this

However, because Nasdaq has established January 14, 2013 as the ex-dividend date for the Distribution, and as a result of related “due bill” trading procedures, persons acquiring shares of Liberty common stock in the market through January 11, 2013 will still receive shares of Spinco common stock in the Distribution. Liberty expects to complete the Distribution at 5:00 p.m., New York City time, on January 11, 2013. The issuance of Spinco shares and the completion of the Spin-Off are subject

So, the distribution is to holders of record at the end of January 10, but if you buy on the 11th, you get it too. And somehow, the ex-dividend date is three days after the distribution date. How can that be? Beats us. We’re not done yet though.

If the Spin-Off is completed, it is expected that Spinco’s Series A and Series B common stock will trade in the regular way on the Nasdaq Global Select Market as follows:

  • Under the temporary symbols “LMCAD” and “LMCBD,” respectively, beginning on January 14, 2013.
  • Under the permanent symbols “LMCA” and “LMCB,” respectively, beginning on January 22, 2013.

Shortly prior to the Spin-Off, Liberty will change its name to “Starz” and Spinco will change its name to “Liberty Media Corporation.” As a result of these name changes and Spinco’s use of the “LMCA” and “LMCB” trading symbols as described above, following the spin-off, Starz’s Series A and Series B Liberty Capital common stock will begin trading under the new symbols “STRZA” and “STRZB,” respectively, on the Nasdaq Global Select Market on January 14, 2013. Prior to such time, however, Liberty’s Series A and Series B Liberty Capital common stock will continue to trade under the symbols “LMCA” and “LMCB,” respectively.

The parent company will begin trading as STRZA and STRZB on January 14. At the same time, the spinoff will begin trading under the tickers LMCAD and LMCBD. Up until that time, the full company will continue to trade as LMCA and LMCB, and the new child will trade on a when-issued basis at LMCAV and LMCBV. After a week of trading, on January 22, LMCAD and LMCBD will change for a final time to the old LMCA and LMCB tickers.

For a short while there will be a lot of moving parts and changing tickers, but by January 22, Starz will be trading as STRZA and STRZB, and the new Liberty Media will be back trading under LMCA and LMCB. What will happen next? With Starz rumored to be an acquisition target and Liberty Media cementing control of SiriusXM(SIRI), it’s anyone’s guess.

Disclosure: The author holds no position in any stock mentioned.

 

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