FTC cues sale of QVC

Liberty's free to own home shopping net

NEW YORK — John Malone was formally cleared Friday to be the proud owner of a home shopping net as the Federal Trade Commission gave its perfunctory seal of approval to Liberty Media’s $7.9 billion purchase of Comcast’s 57% stake in QVC.

Deal, due to close in the fall, will give Liberty 98% of Westchester, Penn.-based QVC.

Acquisition eases pressure from the SEC as Liberty has been hovering dangerously close to the line that separates true operating companies from investment funds, with all the expensive tax implications that would have applied to that classification.

QVC, which is a cash machine, generating some $858 million in cash flows off of $4.4 billion in sales last year, nevertheless reported lukewarm results in its second quarter.

Domestic channel revenues inched up only 2% over the second quarter of 2002 to $862 million.

Meanwhile, Malone, who is currently vacationing in Europe, has been keeping quiet on his involvement with the Vivendi Universal auction.

While numerous reports have suggested the company has bowed out of the auction, few who know Malone believe he would make his true intentions known, especially since as a Viv U shareholder, it’s in his interest to keep a bidding war for VUE alive.

Investors say they’d be happy if Liberty steers clear of Universal assets, which many say it lacks the managerial resources to mend.

Comcast gain of $6.5 bil

For its part, Comcast will record a pre-tax gain of $6.5 billion from the sale of its QVC stake. Deal was comprised of $2.6 billion in Liberty Media stock and $5.3 billion in debt.

With the addition of QVC to its portfolio, analysts value Liberty’s assets at a hefty $53 billion. That includes roughly $24 billion worth of holdings in dozens of other publicly traded media and telecom companies, a $14 billion valuation for QVC and $6 billion for its 50% stake in Discovery Communications.