Liberty Media revealed today, Wednesday, November 13, its intention to reorganize its structure by separating the Liberty Live Group into an independent, publicly traded entity. This proposed demerger, known as “Split-Off”, involves the reallocation of Quint, a subsidiary of Liberty Media acquired in January 2024, from the Formula One group to the Liberty Live Group. In exchange, Liberty Live will receive certain private assets, with a cash consideration which will be subsequently valued based on the relative values of these assets at the time of the transaction.
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Greg Maffei, President and CEO of Liberty Media, says the split aims to simplify the company's capital structure, reduce the value gap between net assets and Liberty Live shares, and improve trading liquidity. for both entities. “Separating Liberty Live Group into a separate entity will simplify Liberty Media's capital structure, is expected to reduce the discount of our Liberty Live shares to their net asset value, and will improve transaction liquidity for both entities, » says Maffei. “Since acquiring Quint, we have strengthened its partnership with Formula 1 and gained a better understanding of ticket demand trends from our fans, but Quint is also complementary to our interest in Live Nation, particularly as Live Nation is expanding its hospitality operations. »
The split will be accomplished through the repurchase of Liberty Live stock through the issuance of new shares in a newly formed company, Liberty Live, Inc. As a result, current holders of Series A, B and C shares of Liberty Live will receive a corresponding series share in Liberty Live, Inc., thereby making the two companies independent of each other and publicly traded. Liberty Media will retain ownership of its driving assets in the sport, including Formula 1 and, upon completion of the acquisition, MotoGP, while ceding control of Quint to Liberty Live, Inc., whose activities will increasingly be oriented towards live entertainment and hospitality.
This split seems to respond to a logic of specialization. Liberty Media, focusing on motorsports such as Formula 1 and ultimately MotoGP, is refocusing on its core strengths in the sport, which are fast-growing businesses with a global fan base and well-established commercial infrastructure. established. In contrast, Liberty Live Group, with holdings like Live Nation, can move more into live entertainment and hospitality, which is particularly strategic as demand for live events explodes. This refocusing allows each entity to address its respective target markets more precisely and to adjust its investments and strategies accordingly.
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Liberty Live, Inc. will own approximately 69.6 million shares of Live Nation, a significant position that highlights the close ties between Liberty Media and Live Nation's entertainment operations. This new entity will also integrate various private assets, as well as debt and liquidity currently allocated to Liberty Live Group. In parallel, Liberty Media will continue to own and manage its leading sports holdings, including its Formula 1 and MotoGP assets, its equity, its private assets and its financial obligations.
The timing of this spin-off remains subject to certain conditions, including specific approvals from Liberty Live shareholders and a favorable tax opinion. According to Liberty Media's forecasts, the separation is expected to be completed by the second half of 2025, with the aim of this transaction being tax efficient for current shareholders. Once the split is finalized, Liberty Media and Liberty Live, Inc. will be listed independently, most likely on the Nasdaq Global Select Market, although secondary options will be considered if necessary.
Greg Maffei will discuss this strategy in more detail at Liberty Media's annual investor meeting, scheduled for November 14, 2024 in New York.
