MLB's Braves now batting for Liberty
EmptyNEW YORK -- Time Warner Inc. and Liberty Media Corp. said Thursday that they've managed to seal a complex deal with an estimated value of about $1.5 billion by a midnight deadline. The transaction will see the world's largest media conglomerate transfer the Atlanta Braves baseball team, other assets and cash to Liberty in return for 68.5 million TW shares that Liberty had held.
Besides the Braves, the company founded by cable pioneer John Malone also got Leisure Arts Inc. -- a part of TW's Time Inc. publishing unit that comprises several craft magazines -- and $960 million in cash in the transaction. Liberty also retained about 103 million shares, or about 2.8% of TW common stock.
TW said the deal "essentially" completes its $20 billion stock buyback program, with Wall Street observers looking for continued dividend payments and potential further stock repurchases to create shareholder value.
TW management has said the company's board will discuss future capital allocation strategies once the buyback is done.
Major League Baseball approved the Braves transaction, but Liberty and TW had to finalize the swap by midnight to avoid changes in the tax code, which might have caused the deal to fall through as Liberty is known for avoiding taxes in transactions wherever possible.
Liberty will hold the newly acquired assets under its Liberty Capital Group, which also houses Starz and stakes in media and telecommunications firms.
"We are pleased with the successful conversion of these Time Warner shares as this transaction enhances our financial and strategic flexibility," Liberty chairman Malone said. "We are pleased with the value created for our shareholders from our ownership of Turner Broadcasting and Time Warner."
TW chairman and CEO Richard Parsons lauded the deal as "an important advance in our commitment to deliver greater value to our shareholders" and said it also "helps to streamline our portfolio of assets as we focus on our core businesses."
Liberty president and CEO Greg Maffei said that the transaction "represents another significant step in our transition to a focused operating company."