Analyst Merrill Lynch has predicted that the American TV distributor Liberty Media share price, in 2005, will be driven by the highly anticipated potential deal with Rupert Murdoch’s News Corp.
Liberty Media, owned by John Malone, holds 324.6 million News Corp NWS voting share, valued at $9.16 billion in total at current prices or $3.25 of Liberty’s estimated $13.85 NAV/share. Although Liberty management has stated that it is a happy News Corp shareholder and harbours no hostile intent Merrill believe that News Corp is looking to reduce Liberty’s 18% voting interest.
Mr Malone surprised News Corp last November by taking an option to increase his voting stake in News Corp to 18%, second only to the 29% held by the Murdoch family (see News Corp to Buy Liberty Media Shares).
Elsewhere in the US media market, News Corp is set to increase its share of US television company Fox Entertainment, acquiring full control of the group, in a deal said to be worth $5.9 billion.
Mr Murdoch won approval for the deal over the weekend and the buy-out would leave him with cash reserves at News Corp to fund a possible buy-back of voting shares acquired by Liberty.
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