Liberty Media Starz Spin-off Details

The spin-off was effective Jan 10, 2013. It worked as follows:

1. Liberty Media was renamed Starz, LLC. 
2. The business assets of Liberty Media except Starz assets were transferred to Liberty Spinco, Inc. which was in turn renamed as Liberty Media. 
3. As a result, old Liberty Capital (LMCA) shareholders received one share of new LMCA common stock for each of the old shares owned. The old LMCA shares were renamed STRZA. The two new stocks (LMCA and STRZA) started trading Jan 14, 2013. 

 STRZA entity had 2012 revenue of around $1.63B and EPS of $2.08. Revenue is expected to remain steady next year with EPS coming down to $1.72. The valuation appears reasonable although the real play with STRZA is the chance of a buy-out. Five-star hedge funds are already in the game: Buffett previously held LMCA shares and so should end up holding 5.6M STRZA shares - 4.67% of the company. Other funds with sizable stakes include Steve Cohen's SAC Capital, Gates Foundation, D.E. Shaw, and Madison Street Partners. SAC & Gates initiated ~6% positions late last month - their cost-basis should be around $16. 

John Malone controls the business as evidenced by the over 40% voting stake.

Last Updated: 06/2013.