Liberty Media eyes News Corp's stake in DirecTV
NEW YORK (Reuters) - Liberty Media Corp. said on Thursday it may swap its stake in News Corp. for a controlling interest in DirecTV Group Inc., a move that would thrust cable pioneer John Malone into the satellite television arena.
Malone, Liberty Media's chairman, has been in discussions with News Corp. Chairman and Chief Executive Officer Rupert Murdoch over making a swap for Liberty Media's close-to-20-percent stake in News Corp. since Malone quietly snapped up shares in 2004.
That move had spurred Murdoch to raise defenses by enacting a poison pill to make a hostile takeover prohibitively expensive.
The two former associates, who have competed and have helped each other out over the past two decades, have been unable to resolve the matter. Both have said there is no rush.
"We were saying in the marketplace that we may exchange our roughly $11 billion stake in News Corp. for a controlling stake in DirecTV," Liberty President and Chief Executive Officer Greg Maffei said at a Shop.org conference.
Media reports of talks involving DirecTV first appeared in September and were seen by Wall Street as a tacit admission by Murdoch that he no longer views U.S. satellite TV as a viable, competitive video and information service. Gaining control of DirecTV had been a hard-won deal to help him stitch together a global network of satellite TV distribution.
Publicly, Murdoch has continued to defend the U.S. satellite TV market despite a slowdown in subscriber growth.
Since last year's $580 million purchase of MySpace.com, a social network Web site popularized by teenagers, Murdoch has been talking up the Web, as he now believes Internet businesses will grow faster than cable networks and newspapers.
Last month, he sent his wife Wendi Deng to Beijing to launch a version of MySpace for the Chinese market, as part of plans to expand into 11 markets globally.
For Liberty, Maffei said a stake in DirecTV would help transform the company from a repository for Malone's past investments, which also include a big stake in Time Warner Inc., into a company defined by operating units such as the QVC shopping network.
News Corp.'s widely held class A shares rose 46 cents, or 2.3 percent, to $20.61 on the New York Stock Exchange. Liberty Interactive class A shares rose 3 cents to $21.06; Liberty Capital class A shares rose 70 cents to $87.35 on Nasdaq in late morning trade.