Murdoch Wants Malone to Standstill11/16/2004 7:15 AM Eastern
New York -- News Corp. chairman Rupert Murdoch told a group of reporters he wouldn’t mind if Liberty Media Corp. chairman John Malone remained a large voting investor in the company, as long as Malone promised not to increase his stake in the media giant any further.
Earlier this month, Liberty surprised News Corp. with a deal that would nearly double its voting stake in the company from 9% to 17%. The deal, expected to be completed in April, involves swapping nonvoting News Corp. shares worth about $1.5 billion for the voting shares. Liberty cut the deal with Merrill Lynch International.
News Corp. responded almost immediately by approving a shareholder’s-rights plan, also called a poison pill, that would seriously dilute any attempt by an individual investor to raise its voting stake in the company above 15%.
At the Fox Entertainment Group Inc. annual meeting here Tuesday, Murdoch said he wouldn’t object to Malone keeping that stake as long as he signed a standstill agreement. In standstill agreements, a party usually agrees not to raise his stake above a certain level.
Asked if he was upset by Malone’s move -- the Liberty chairman didn’t inform News Corp. of the deal until it was announced -- Murdoch said the two remain friends.
“That’s just John negotiating,” Murdoch said. “We know each other pretty well. It’s fine.”
Murdoch said he and Malone have had some “friendly conversations” since the stock deal was announced, but not on specific matters.
It is believed that Malone could have amassed the News Corp. voting stake as a means of swapping it to News Corp. for programming assets, or to use it as a motivator for News Corp. to buy Liberty programming assets like Starz Encore Group LLC or its 50% interest in Discovery Communications Inc.
While Murdoch would not talk about speculation, he said the two have not discussed Liberty assets.
“We’ll probably have a meeting discussing all sorts of possibilities in a month or two,” Murdoch said, adding that while DCI is “a very fine asset,” Liberty’s 50% ownership makes it “a lot less interesting.”