AT&T to let go of Liberty

AT&T (NYSE: T) approved the first step of its restructuring.

After market close Wednesday, AT&T said it will spin off the Liberty Media (NYSE: LMG) tracking stock. The announcement marks the first move in AT&T's previously announced breakup into at least four independent businesses.

Liberty specializes in media programming, as well as investments in media and communications companies. Spinning off the unit allows Liberty, which was acquired by AT&T as part of the Tele-Communications Inc. purchase last year, to pursue its own strategies and relieves regulatory concerns about the Federal Communications Commission's cable ownership rules.

AT&T hopes to carry off the spinoff as a tax-free deal.

Also Wednesday, Liberty reported third quarter net income of $1.76 billion on revenue of $436 million, excluding currency adjustments and unrealized losses among Liberty's holdings. Including those items, Liberty lost $180 million.

Although Liberty is a wholly-owned subsidiary of AT&T, the unit is governed by a separate board chaired by former TCI leader John Malone, and its profits and losses are not part of earnings applicable to AT&T common stock.

Shares of AT&T fell 0.125 to 20.5625 in Wednesday's regular trading, prior to the spin-off announcement. Liberty shares rose 0.0625 to 15.625 ahead of the news.

• AT&T to restructure into four new companies
• THE DAY AHEAD: AT&T's spin doesn't ring true
• 2HRS2GO: Breakup would make AT&T just another company>