Liberty Media ( L) took a step Monday toward unlocking value in its sprawling media portfolio, announcing a tax-free spinoff of its international holdings, which include a controlling stake in European cable company UnitedGlobalCom ( UCOMA).

The company also disclosed fourth-quarter financial results that showed revenue improvement at several top holdings. Investors welcomed the news, bidding the shares up 44 cents, or 3.8%, $12.15.

Liberty will dividend out a new, publicly traded company called Liberty Media International that will comprise, along with UnitedGlobalCom, Japanese cable company Jupiter Telecommunication and a handful of Latin American properties. The transaction is expected to occur in early summer.

Liberty behaves something like a closed-end mutual fund of properties acquired over the years by the former cable company Tele-Communications Inc. The spinoff is part of CEO John Malone's effort to reduce the discount at which Liberty trades to its components' asset value, estimated recently to be roughly 25%. Liberty's stock has been largely unchanged for five years as investors have fretted about the holding company's complexity and the difficulty of unlocking value in constituent companies whose appreciation represents huge, taxable capital gains.

By spinning off the foreign companies, Malone simplifies Liberty's valuation structure without creating a large tax bill for shareholders, while possibly making the remaining company -- which include a wholly owned QVC plus stakes in Time Warner ( TWX), InterActiveCorp ( IACI) and News Corp. ( NWS) -- a more attractive acquisition candidate.

Meanwhile, Liberty said revenue rose at QVC to $1.57 billion in the fourth quarter from $1.16 billion a year ago, with domestic revenue up 6% on higher sales of clothing and accessories. Revenue at its Starz/Encore cable network rose to $235 million from $228 million.

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