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Malone Adds Some 'Capital’

7/11/2008 8:00 PM Eastern

Cable legend John Malone has been buying up shares of Liberty Capital Group, one of four tracking stocks associated with his Liberty Media. He spent about $95 million for 3.8 million shares.

Malone — who already controls Liberty Capital — turned some heads with the purchases initially, mainly because the tracker is basically made up of Liberty’s castoffs.

While Liberty Entertainment holds Starz Entertainment and DirecTV and Liberty Interactive houses cable shopping network QVC, Liberty Capital includes Major League Baseball’s Atlanta Braves and several minority stock holdings, including stakes in Time Warner Inc. and Sprint Nextel.

In published reports, Liberty officials said Malone believes Liberty Capital stock is cheap and a good buy.

The stock has certainly gotten cheaper: Liberty Capital is down about 21% so far this year.

But the same could be said of the other Liberty trackers — Liberty Interactive is down 24.7% and Liberty Global is down 22.5% in that same period, while Liberty Entertainment is down 11.3% since March 3 (the day it began trading).

Janco Partners media analyst April Horace said while other Liberty trackers have declined this year, Liberty Capital probably has the biggest discount to net asset value (NAV). And she said that of all of Malone’s holdings, Liberty Capital represents the smallest piece.

“Obviously he couldn’t purchase the stock if there was an imminent deal with Time Warner or Sprint, but $100 million is nothing to sneeze at,” Horace said.

September