Swap may see DirecTV go to Malone
News. Corp close to swapping its stake in satellite TV company
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News Corp. is closing in on a long-anticipated deal to swap its 39% stake in DirecTV to John Malone's Liberty Media. In return, Malone will hand over his $11 billion in News Corp. stock -- a cache that has made him the conglom's largest shareholder after the Murdoch family.
Pact, which insiders are hopeful will close within the next two weeks, removes the threat that Malone could launch a hostile takeover of the media company. That prospect, while perhaps unlikely, unnerved Rupert Murdoch enough that he's had a so-called poison pill anti-takeover provision in place ever since Malone upped his stake in News Corp.
Liberty would also receive some cash and other assets.
In a presentation Wednesday, Liberty CEO Greg Maffei said DirecTV would provide valuable distribution for Liberty's content assets. "DirecTV adds value potentially to other elements in our portfolio. We have content assets, but we don't have the distribution muscle we used to have," he said at a media conference in Gotham. Liberty has been in that position for years, ever since Malone sold his giant cable operation TCI.
"Since the sale of TCI, we tried to protect those assets as much as possible. DirecTV could help in that process," Maffei added.
Liberty owns all or most of Starz-Encore, QVC and Discovery, along with stakes in smaller networks. It's also launching a film division with former MGM exec Chris McGurk.
Maffei also noted that Liberty would save billions of dollars in taxes on the swap vs. other types of transactions.
He indicated that little would probably change in DirecTV's executive suite, noting that Liberty has "a lot of respect" for the satcaster's management team led by Chase Carey.
