US mogul eyes media mantle (Liberty Media/UCOMA)
By Jane Schulze and The Times (Australia)
March 17, 2004
THE News Corporation Ltd's second biggest shareholder, US group Liberty Media, has put the world's media on notice by revealing plans to create an aggressive new international business worth up to $US9 billion.
And the separately listed group, seeded with Liberty's existing non-US assets and to be called Liberty Media International, may eventually trade assets with News, according to Liberty chairman John Malone.
Mr Malone told analysts he "absolutely" saw LMI as the next Tele-Communications Inc - the US cable pay-TV business he built up then sold to US telephony group AT&T for $US48 billion in 1999.
"We see the opportunity to build another TCI but probably one quite a bit bigger and more diversified," he said. "I can't see why LMI and (its core asset) UnitedGlobalCom can't turn out to be the dominant international cable operator."
Mr Malone said there were numerous cable pay-TV groups outside the US funded by private investors who would consider selling to LMI.
While no deals with News were on the table, he said "there are assets that News has that Liberty finds attractive and would not mind owning directly, and perhaps there are assets that Liberty has that News would find attractive".
News is reportedly considering the $US3.4 billion ($4.6 billion) sale of satellite group PanAmSat, and that could give Liberty a satellite distribution platform to protect its cable businesses. A Liberty spokesperson would not identify which of News's assets the US group considered attractive.
Analysts pointed to the lucrative Discovery channel as one of the only assets belonging to Liberty that would seriously interest News. Liberty owns 50 per cent of Discovery, 50 per cent of Court TV and a small stake in the E! entertainment channel.
Mr Malone hoped the separation of Liberty's international and US assets would improve their market value while also "freeing the international companies up to be more aggressive".
Mr Malone, who owns 28 per cent of Liberty, indicated he would be a large investor in LMI as he wanted to diversify his wealth globally.
LMI will be the largest cable-based pay-TV company outside the US with 13.5 million subscribers and has plans to enter new markets such as Russia, China and India.
News Corp's satellite-based pay-TV network has 26.6 million subscribers globally.
In January Liberty swapped much of its stake in News's non-voting shares for voting scrip, giving it a 9.15 per cent voting stake in the group, which owns The Australian.
Liberty's shares in News will not be included in the new vehicle. Instead, LMI's main assets will be its 90 per cent voting stake in UnitedGlobalCom (one of the owners of regional pay-TV group Austar) and pay-TV interests in Japan and Latin America. |
