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Malone keeps his News Corp. cache

Liberty topper 'less interested' in possible transaction

NEW YORK — Maverick media mogul John Malone backed away Tuesday from rampant speculation that he’d be willing to let go of his company’s large interest in Rupert Murdoch’s empire in exchange for a pot of cash mixed in with some News Corp. assets.

Speaking at a Banc of America Securities investors confab in Gotham, the chairman-CEO of Liberty Media said he was “frankly less interested” in such a transaction than has been suggested.

“I’m not rejecting it out of hand, but the timing would have to be quick and the generosity from the News Corp. side would have to be compelling. Rupert is a great guy, but I’ve never found him to be compellingly generous,” Malone said. “At the end of the day, I doubt they would unwind assets we would want.”

That means Malone would simply hold on to the News Corp. stock –much to the consternation of Murdoch, who has made it clear he wants the matter resolved, particularly now that he’s done bringing the Fox Entertainment Group back into the News Corp. fold.

Covering itself in the meantime, the News Corp. board has adopted a poison-pill provision making a hostile takeover by Liberty prohibitively expensive.

Ever outspoken, Malone said it must have been a “rude awakening” for Murdoch to learn that Liberty had dramatically increased its voting stake in News Corp. to 18% — second only to the 30% stake held by the Murdoch family.

Malone cut the surprise stock deal just as Murdoch was relocating News Corp. from Australia to the U.S. at the end of 2004.

So far this year, Murdoch and Malone haven’t met, although Murdoch is expected to turn his full attention to the Liberty matter when he returns from India early in April.

Malone said he would prefer to either hold on to the stake or swap the voting stock for nonvoting stock and then deliver those shares to Liberty investors tax-free. “Then I would deliver the voting stock into the hands of the Murdoch family. If I could pull that off, Rupert would build a statue for me,” Malone told shareholders.

Liberty’s stake could be worth as much as $5 billion-$7 billion.

One looming concern is pending changes to the tax law that could make an asset swap less attractive.

Investors attending the confab also peppered Malone with questions about Liberty’s recent decision to spin off its half of Discovery Communications into a new publicly traded company, Discovery Holdings.

As a separate entity, Malone said Discovery would have access to capital markets that it previously lacked. He added that talks will continue with Cox and Newhouse — Discovery’s two other owners — about contributing their stakes to the venture.

“I’m quite optimistic that we will be able to arrive at an agreement,” Malone said. “Set Discovery free!”

Looking to his overseas venture, Liberty Media Intl., Malone said he would like to explore growth opportunities in Eastern Europe, along with increasing the company’s market share in Japan.

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