Murdoch, Malone Strike Stock Deal

0

A stock swap deal between media moguls Rupert Murdoch and John Malone has been reached, giving Malone’s LibertyMedia Corp. ownership of DirecTV Group Inc., according to news reports.


Liberty Chairman Malone is swapping his 19 percent stake in Murdoch’s News Corp. valued at $16 billion for Murdoch’s 38 percent stake in the El Segundo satellite television provider valued at $7.4 billiion. Malone also will get three regional sports networks owned by News Corp. and $550 million in cash.


The deal was said to be structured mainly by Liberty’s Chief Executive, Gregory Maffei, and News Corp.’s Chief Financial Officer, David DeVoe. Analysts value the total deal at close to $25 billion.


A deal of this sort had been rumored for months, given that Malone’s stake News Corp. was large enough to prompt Murdoch, who holds 30 percent of News Corp.’s shares, to adopt a “poison pill” anti-takeover defense two years ago.


After the transaction is completed, the voting stake from Malone’s shares will simultaneously be retired, eliminating the second-largest holding in News Corp. and elevating Murdoch and his family’s stake to 36 percent of the shares. A full legal agreement is expected to be signed and announced within two weeks.


The deal comes a month after the El Segundo-based satellite TV provider reported nearly a three-fold jump in third quarter profit. Maffei told a media conference in New York that Liberty already had various options it was considering for DirecTV, including merging it with rival Echostar.


Shares in DirecTV were flat at $23.54 while shares of News Corp. gained 92 cents to $22.62.

No posts to display