Liberty Media to spin off satellite, TV assets

By MarketWatch

WASHINGTON (MarketWatch) -- Liberty Media Corp. on Wednesday said it would spin off a part of its business that includes DirecTV and the Starz television channels into a separately traded company.

Those businesses now fall under the umbrella of a unit called Liberty Entertainment (LMDIA:27.53, +0.41, +1.5%) , which trades as a so-called tracking stock. Liberty Entertainment shares were up 1% to $27.34.
Liberty Media trades under three tracking stocks: Liberty Entertainment, Liberty Capital (LCAPA:16.00, +0.07, +0.4%) and Liberty Interactive (LINTA:13.95, +0.32,+2.4%) .

Tracking stocks, which have fallen out of favor in recent years, allow investors to obtain a financial stake in different parts of a business and "track" its performance. Yet the parent company retains full ownership of all the assets. For this reason, the stocks often trade at a discount to actual equities.

Under the parent company's proposal, Liberty Entertainment will be transformed into a separately traded business. Shares of the tracking stock will converted into shares of the new subsidiary in a tax-free spinoff to investors.

Liberty Media to spin off satellite, TV assets....