Liberty Interactive Corp. Announces Reattribution of Digital Commerce Businesses & Dividend on Liberty Interactive Tracking S...
October 03 2014 - 5:11PM
Business Wire
Reattribution Creates QVC Tracking
Stock
Liberty Interactive Corporation (“Liberty Interactive”) (Nasdaq:
LINTA, LINTB, LVNTA, LVNTB) today announced that its board of
directors approved the change in attribution from the Liberty
Interactive Group to the Liberty Ventures Group of its digital
commerce companies, which were valued at $1.5 billion, and $1
billion in cash. In return, Liberty Interactive Group shareholders
will receive approximately 67.67 million shares of Liberty Ventures
common stock or approximately 0.14 of a Liberty Ventures share for
each share of Liberty Interactive Group common stock outstanding on
the record date1. Liberty’s digital commerce companies are
comprised of Backcountry.com, Bodybuilding.com, CommerceHub, Evite,
Provide Commerce and The Right Start.
“We are excited to introduce the QVC Group which focuses on our
leadership position in video commerce, enables a cleaner comparable
analysis and provides for more targeted share repurchase and equity
incentives,” said Greg Maffei, Liberty Interactive President and
CEO. “The Liberty Ventures Group is projected to have over $2.7
billion in cash by year end which we can invest in a wide set of
opportunities in TMT, including digital commerce."
In exchange for the digital commerce companies and $970 million
of cash (collectively, the “Reattributed Assets”), an inter-group
interest in Liberty Ventures Group was created in favor of the
Liberty Interactive Group, which we now refer to as the QVC Group.
This inter-group interest is represented as a number of Liberty
Ventures shares that will be issued to the QVC Group, which we
refer to as the “Inter-Group Interest Shares” (as calculated
below). Immediately following the reattribution, which is effective
immediately, Liberty Interactive’s board declared a dividend of the
Inter-Group Interest Shares to the holders of QVC Group common
stock in full elimination of the inter-group interest. In
connection with the payment of the dividend, typical antidilution
adjustments will be made to outstanding QVC Group equity incentive
awards, and the Liberty Interactive board has reattributed $30
million in cash (outside of the Reattributed Assets) to the Liberty
Ventures Group relating to its assumption of liabilities related to
those awards.
In the dividend, the Inter-Group Interest Shares will be
allocated, pro-rata, to the outstanding shares of QVC Group Series
A common stock and QVC Group Series B common stock as of 5:00 p.m.,
New York City time, on October 13, 2014, the record date for the
dividend, with holders of QVC Group Series A common stock to
receive shares of Liberty Ventures Series A common stock and
holders of QVC Group Series B common stock to receive shares of
Liberty Ventures Series B common stock. Cash will be paid in lieu
of fractional shares. Liberty Interactive will determine and
announce the final per share dividend ratio promptly following the
record date, together with the date on which the QVC Group common
stock is expected to begin trading ex-dividend. The distribution
date for the dividend will be October 20, 2014.
The Inter-Group Interest Shares were calculated in accordance
with Liberty Interactive’s restated certificate of incorporation as
follows: the total fair value of the Reattributed Assets, as
determined by Liberty Interactive’s board, of $2.47 billion,
divided by the average of today’s high and low sales prices for the
Liberty Ventures Series A common stock, which is $36.50, resulting
in 67,671,232 shares of Liberty Ventures common stock so issuable.
The Inter-Group Interest Shares will be allocated such that the
number of shares of Series A Liberty Ventures common stock and
shares of Series B Liberty Ventures common stock issued in the
dividend will be in the same proportion as the shares of QVC Group
Series A common stock and QVC Group Series B common stock
outstanding on the Record Date, with each share of QVC Group Series
A common stock and each share of QVC Group Series B common stock
receiving the same fraction of a share of Series A or Series B
Liberty Ventures common stock, as the case may be.
In connection with the reattribution, QVC increased the balance
on its credit facility to $1.06 billion.
Provide Commerce is party to an agreement to be merged into FTD
Companies, Inc.
In connection with the reattribution, Liberty Interactive has
applied to the Nasdaq Stock Market to change the “LINTA” trading
symbol to “QVCA” and the “LINTB” trading symbol to “QVCB.” The
effective date of this change will be announced separately.
Liberty Interactive suspended its stock repurchase activity in
September and will reevaluate the resumption of repurchases after
the public announcement of its earnings for the third quarter.
Forward-Looking Statements
This press release includes certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements about share repurchases, projected
cash balances, potential investment opportunities and other matters
that are not historical facts. These forward-looking statements
involve many risks and uncertainties that could cause actual
results to differ materially from those expressed or implied by
such statements, including, without limitation, general market
conditions, cash requirements and the availability of investment
opportunities. These forward looking statements speak only as of
the date of this press release, and Liberty Interactive expressly
disclaims any obligation or undertaking to disseminate any updates
or revisions to any forward-looking statement contained herein to
reflect any change in Liberty Interactive's expectations with
regard thereto or any change in events, conditions or circumstances
on which any such statement is based. Please refer to the publicly
filed documents of Liberty Interactive, including the most recent
Form 10-K and Forms 10-Q, for additional information about Liberty
Interactive and about the risks and uncertainties related to
Liberty Interactive's business which may affect the statements made
in this press release.
About Liberty Interactive
Corporation
Liberty Interactive Corporation operates and owns interests in a
broad range of digital commerce businesses. Those interests are
currently attributed to two tracking stock groups: the Liberty
Interactive Group (which we now refer to as the QVC Group) and the
Liberty Ventures Group. The businesses and assets attributed to the
QVC Group (Nasdaq: LINTA, LINTB) consist of Liberty Interactive’s
subsidiary, QVC, Inc., and its interest in HSN, Inc., and the
businesses and assets attributed to the Liberty Ventures Group
(Nasdaq: LVNTA, LVNTB) consist of all of Liberty Interactive
Corporation’s businesses and assets other than those attributed to
the QVC Group, including its interest in Expedia, its subsidiaries
Provide Commerce, Inc., Backcountry.com, Inc., Bodybuilding.com,
Inc., Commerce Technologies, Inc., LMC Right Start, Inc. and Evite,
Inc., and minority interests in Time Warner, Time Warner Cable,
Lending Tree and Interval Leisure Group.
1 This estimate is based on LINT common shares outstanding as of
July 31, 2014.
Liberty Interactive CorporationCourtnee Ulrich, 720-875-5420
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