Tax Ruling Prompts TCI to End Spinoff Plans
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NEW YORK — Tele-Communications Inc., the nation’s biggest cable company, scrapped plans Wednesday to split itself up after the Internal Revenue Service declined to make the transaction tax-free.
The Englewood, Colo.-based firm announced in December that it would spin off the Liberty Media and international businesses as part of an effort to stem losses, reduce a heavy debt load and boost the sagging stock price. At the time, TCI said the ultimate decision would hinge on a number of factors, including board approval and a favorable tax ruling by the IRS.
In a statement released late Wednesday, TCI said that it may consider refiling its request with the IRS in the future.
Under the proposal for the spinoffs, Tele-Communications International Inc., which makes up the company’s international programming and cable assets, would have been spun off to shareholders of TCI Group, the company’s cable TV arm. Tele-Communications International is majority owned by TCI, but part is already owned by the public.
Liberty Media Corp. would have been spun off to holders of Liberty Media Group common shares.
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