QVC Credit Spurs Speculation

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Liberty Interactive's recent move to bolster its credit lines has at least one analyst believing the interactive media arm of Liberty Media Corp. is contemplating a larger share buyback or an acquisition.

In an 8-K filing with the Securities and Exchange Commission on Oct. 10, Liberty Interactive, a tracking stock that includes Liberty's 100% interest in cable shopping channel QVC Inc. as well as lesser stakes in IAC/Interactive Corp. and Expedia.com, said it had arranged to expand an existing credit facility through QVC by $1.75 billion.

That would boost QVC's credit line to $5.25 billion, with only $1.2 billion borrowed as of June 30.

In a research report, Jefferies & Co. media analyst Robert Routh speculated that Liberty Interactive is either poised to enter into a new share-repurchase program or it is assembling a war chest for acquisitions.

Liberty Interactive has already repurchased about $340 million worth of its stock by the end of the second quarter, leaving about $660 million left on its existing $1 billion buyback program. Routh believes the recent run-up in Liberty Interactive shares — they have risen 5.3% ($1.06) since Sept. 26, closing Oct. 11 at $21.03 apiece — could mean Liberty Interactive has been actively repurchasing stock in the third quarter.

Other than a buyback, Routh speculated the additional credit line could be used in a deal with News Corp. regarding Liberty Media's 19% voting stake in the media giant. Speculation heated up last month that Liberty could get News Corp.'s 38% controlling stake in DirecTV Group Inc. in return for the shares and cash.

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