Murdoch, Malone Seal Stock Deal

Dec 26, 2006  •  Post A Comment

News Corp. and Liberty Media Corp. have signed off on a multibillion-dollar share-exchange agreement that ends a two-year corporate tug of war and secures Chairman Rupert Murdoch’s control over the News Corp. empire.

Cable pioneer John Malone’s Liberty, which has been both an ally and a competitor, gave up its 16.3 percent stake in News Corp. in return for Murdoch’s 38.4 percent stake in satellite TV service DirecTV, regional sports networks in the Northwest, Pittsburgh and the Rocky Mountains, plus $550 million in cash.

The agreement puts Liberty, whose holdings include QVC, Encore and Starz, back in the TV distribution business for the first time since Mr. Malone sold cable pioneer Telecommunications Inc. to AT&T in 1998.

News Corp. said an $11 billion stock buyback it plans will boost the value of its stock while accomplishing a tax-free divestiture of the DirecTV stake.

The transaction, which will need regulatory and shareholder approval, is expected to be completed in the second half of calendar 2007, according to a statement issued Friday.

(Editor: Liff)