Liberty Media talks to News Corp about selling stake

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The Independent Online

Liberty Media, the US group run by cable king John Malone, has held talks with rival News Corp about selling the stake it built up in the newspaper and TV giant just over a month ago.

Liberty Media, the US group run by cable king John Malone, has held talks with rival News Corp about selling the stake it built up in the newspaper and TV giant just over a month ago.

Robert Bennett, the chief executive of Liberty, told an investors' conference in New York that "there have been some conversations" between his company and News Corp, which is controlled by Rupert Murdoch. Analysts were expecting Liberty to try to unwind its stake in News Corp, which it dramatically increased in November from 9 to 17 per cent of the company's voting shares.

Liberty is thought to want cash as well as some businesses from News Corp, whose stable of media businesses includes The Times and The Sun and the rapidly expanding Fox television network. If assets change hands as well as cash, the transaction would be tax efficient for both parties.

While Liberty has said it only has friendly intentions towards News Corp, an unwinding of its stake would relieve Mr Murdoch, who has recently moved his corporate headquarters to the United States from Australia.

Immediately after Liberty increased its holding of voting rights in the international media giant, Mr Murdoch introduced a "poison pill" provision which would dramatically dilute the value of News Corp's shares if a takeover bid was mounted.

The Australian-born tycoon, a long-time business associate of Mr Malone, also attempted to convince Liberty to sign a stand-still agreement not to build its stake in News Corp any further. No such agreement has yet been signed.

The two could agree to a "cash-rich split-off" deal, whereby one company which owns a big stake in another agrees to hand over the shares in exchange for cash and a small business.

Liberty has executed such transactions in the past. In July it swapped its 10 per cent stake in E! Entertainment Television, its ownership of the International Channel Networks and $545m (£282m) in cash in exchange for the 4 per cent of Liberty's stock that was owned by Comcast.

Mr Murdoch has been reluctant to talk about the share stake built up by Liberty and he recently scurried away from a company meeting in London without taking any questions, an act seen by commentators as indicative of his concern.

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