Madison Square Garden to
explore splitting into two companies
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[October 28, 2014]
(Reuters) - Madison Square
Garden Co, which owns the New York Knicks and New York
Rangers, said Monday it is considering a plan to
separate its entertainment business from its media and
sports business to create two publicly traded companies.
Shares of the company rose 14 percent in after-market trade.
The company said the live entertainment division would be an
event and venue management company, while the sports and media
unit would run sports teams and regional sports television
"Investors favor companies with greater strategic focus on their
core businesses," Chief Executive Officer Tad Smith said in a
Madison Square Garden said its shareholders would own shares in
both the new companies if it goes ahead with the spin-off. The
company said the idea had been under consideration internally
The company also said its board authorized a plan to buy back
Class A shares of up to $500 million.
"We are very pleased that MSG's board of directors and
management have committed to pursue a plan to enhance value for
all MSG shareholders through the combination of a share
repurchase program and contemplated business spin-off...We look
forward to the full and timely implementation of these plans,"
JAT Capital Management LP said in an email to Reuters.
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JAT has a 9.36 percent stake in the company as of Sept. 22.
The company said it has not set a timetable for the completion of
the potential spin-off.
Madison Square Garden hired LionTree Advisors as financial adviser
for the separation.
Madison Square Garden also nominated activist investor Nelson Peltz
of Trian Fund management LP and Scott Sperling of private equity
firm Thomas H. Lee Partners LP to join its board.
Madison Square Garden shares closed at $65.78 on the Nasdaq on
(Reporting by Soham Chatterjee in Bangalore and Greg Roumeliotis in
New York; Editing by Cynthia Osterman)
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