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Liberty raises flag

News Corp. stock deal to be sooner, bigger

NEW YORK — John Malone’s Liberty Media announced Monday a speeded-up schedule to formally swap its nonvoting News Corp. shares into voting stock via a complex transaction with Merrill Lynch. Move, which provoked a market furor and endless speculation when revealed last month, is now anticipated in mid-January instead of April.

Liberty also added several million more shares to the deal, boosting its latest acquisition to a 9% from an 8% voting block and bringing Liberty’s total voting stake to a hefty 18% — second only to the chunk held by Rupert Murdoch and the Murdoch family.

News Corp. enacted a so-called poison-pill defense last month after Liberty’s announcement of the Merrill Lynch transaction clearly took the giant media conglom by surprise. The measure makes a hostile takeover prohibitively expensive. Liberty’s purchase of the extra percentage point puts it at the limit of the poison pill defense. That measure lasts for a year, then must be approved by shareholders.

Meanwhile, Liberty execs have insisted at every opportunity that a hostile takeover isn’t in the cards and that they fully support the company’s current management. Most recently, at a conference in Gotham, Liberty CEO Dob Bennett said the two sides had held talks and would probably hold more. He didn’t dismiss the idea of some transaction down the road if it were mutually beneficial.

Some News Corp. shareholders feel that Liberty is all but certain to flex its enhanced voting muscle to pressure Murdoch into some type of deal or venture as yet unknown — possibly involving programming assets or Gemstar.

Separately, in two transactions, Liberty Intl. sold its stake in Belgium-based cable TV operator Telenet and its 100% stake in Irish pay TV provider Chorus to pan-European cable giant UnitedGlobalCom in cash and stock deals worth close to $200 million in total.

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