Bennett: Liberty, News Corp. Are ‘Allies’11/09/2004 8:42 AM Eastern
Liberty Media Corp. CEO Robert Bennett took the opportunity of the company’s third-quarter conference call to reassure investors that its recent moves to increase its voting stake in News Corp. had no sinister motives.
Liberty announced last week that it had engineered a deal where it would swap about $1.5 billion of its nonvoting News Corp. shares with Merrill Lynch International for voting News Corp. shares.
The deal, expected to be completed in April, would increase Liberty’s voting stake in News Corp. from 9% to 18%, second only to the 29.5% voting stake held by News Corp. chairman Rupert Murdoch and his family.
Speculation in the industry was that Liberty and its chairman, John Malone, could attempt to convert the rest of their News Corp. voting shares to eventually wrest control from the Murdochs -- speculation that was fueled after News Corp. announced a shareholder’s-rights plan that would prevent a hostile takeover of the media giant.
On a conference call discussing third-quarter results, Bennett said Liberty has no intention of taking control of News Corp.
“We view ourselves as allies of News Corp. and the Murdoch family, and we have no hostile intentions,” Bennett said on the conference call. “We are a large, happy, friendly shareholder. Given the voting position and the sheer number of nonvoting shares that we hold, we understand why News Corp. elected to install its shareholder’s-rights plan. We are neither surprised by it nor troubled by it.”
Later on the call, Bennett added that News Corp.’s board of directors is scheduled to meet concerning the rights plan in about 30 days, hinting that the two companies could work out a deal to swap assets.
Several analysts have speculated that Liberty could be amassing a News Corp. voting stake to force the media giant to buy Liberty content assets such as Starz Encore Group LLC.
“We’re supportive and friendly shareholders,” Bennett said. “We own a big block of voting stock and a big block of nonvoting stock. There is no reason for that to necessarily ever change. That could be the status quo forever, or we could, in the ordinary course, come up with other transactions, which we could have anyway. I don’t want to add fuel to the speculation about what might happen or what might not happen.”