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Liberty on the move

Thu, 02/22/2001 - 7:00pm
Karen Kessler-Tanaka

A busy week for Liberty Media has culminated in some big deals and the reality of a spinoff.

The company is purchasing a majority stake, 55 percent, in six regional cable TV companies owned by German telecom group Deutsche Telekom. By inking this deal, Liberty will gain access to approximately 10 million households in a dozen German states. Reuters quotes a source close to the company as valuing the sale at about $4.54 billion. Liberty expects to close the deal in mid-2001.

Liberty Media also has agreed to invest up to $1.4 billion in communications provider UnitedGlobalCom (UGC), the Denver-based company announced. Liberty will buy up to 100,000 shares of non-dividend paying preferred stock convertible into 54.1 million UGC common shares.

And earlier this week, Liberty Media filed plans with the government to spin off from AT&T. Liberty has been a subsidiary of AT&T since 1999, when it bought TCI. The Liberty spin may or may not be part of AT&T meeting market ownership caps enforced by the FCC. The purchase of MediaOne Group last year pushed AT&T over the U.S. subscriber limit of 30 percent.

According to reports from the Associated Press, the only hurdle remaining between Liberty blazing its own trail is the government allowing the spin to be tax-free. Granted that, the spin could come as early as May.

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