Malone’s QVC to buy Alaskan operator
Liberty adds Alaskan cable company GCI to John Malone empire for $1.12bn
The content arm of John Malone’s Liberty Group, which owns QVC, is buying a phone company for $1.12 billion in order to reduce its dependence on tracking stocks.
Liberty Interactive, which shares a CEO with cable and telecoms unit Liberty Media, is to buy Alaska cable and telecoms group GCI – a company that used to be part of the Malone empire.
“GCI is the largest communications provider in Alaska, generates solid cash flow with upside potential and is a strong fit with the largest businesses in Liberty Ventures,” said Greg Maffei, president and CEO of Liberty Interactive, introducing a complex financial process. “This transaction will ultimately create a standalone Liberty Ventures, reducing the tracking stock discount and enabling an asset-backed QVC Group.”
The newly renamed GCI Liberty, which is the largest communications provider in Alaska, will be reincorporated in the US tax haven of Delaware “as soon as practicable following the closing”, said Liberty.
Maffei is CEO of both Liberty Media, which owns media, communications and entertainment businesses as well as Formula One, and Liberty Interactive, which owns shopping channel QVC and other interests, including Bodybuilding.com. He is also president and CEO of Liberty Broadband and chairman, president and CEO of Liberty TripAdvisor, which were spun off from Liberty Media and Liberty Interactive, respectively, in 2014.
QVC is one of the two tracking stocks in Liberty Interactive, the other being Liberty Ventures Group, which holds equity interests in Liberty Broadband and Charter Communications.
The Alaskan acquisition is designed to help remove the tracking stock structure, even though Malone’s Liberty Global, which owns European cable businesses including Ziggo in the Netherlands and Virgin Media in Britain and Ireland, owns Cable & Wireless Communications through a tracking stock, LiLAC. Some investors are not allowed to own tracking stocks, commentators pointed out.
The deal also means that, with the GCI purchase, the Liberty empire will own cable TV operators in at least four divisions – Liberty Interactive, Liberty Media, LiLAC and Liberty Global. Liberty Interactive will be renamed QVC Group, said the company.