Liberty Media Bids for Home Shopping Network

Liberty Media Corp. said Friday that it had acquired a controlling interest in Home Shopping Network Inc. and proposed a stock-swap merger with the cable television concern.

Liberty Media, a spinoff of the nation’s largest cable TV operator, Tele-Communications Inc., offered $58 million in cash and 4 million shares of Class A common stock in exchange for 20 million Class B common shares of Home Shopping Network.

Liberty said it completed acquisition of the 20 million shares, giving it a controlling interest.

Home Shopping Network is controlled by RMS Limited Partnership, which is owned by Roy Speer, the network’s chairman and CEO.

Speer will remain chairman. But five other board members resigned in connection with the deal and were replaced by four Liberty officers, including company Chairman John C. Malone.

Under the merger proposal, Home Shopping Network shareholders other than Liberty would receive cash and securities valued at $9 a share--$5 in cash, $1 of Liberty Class A common stock and $3 of a new company.

As of Jan. 31, Home Shopping had 64.2 million Class A common shares and 24.2 million Class B common shares outstanding.

A Home Shopping Office spokeswoman, Louise Cleary, said Speer was unavailable to comment on the merger proposal.

The new public company would consist of some of the Home Shopping Network’s more lucrative assets, including its St. Petersburg, Fla., National Call Center, and the National Ticket Network, said Vivian Carr, Liberty Media’s investor relations director.

Though Liberty Media now owns controlling interest in the shopping network and dominates its board, the company will excuse itself from voting on the merger proposal.

If the merger is completed, Carr said the Call Center will continue to handle back-office operations for Home Shopping Network, but will also contract service for other cable operations, such as pay-per-view.

Carr said the Home Shopping Network deal will not affect a Liberty Media offer for the country’s other TV shopping channel, Philadelphia-based QVC Network. Liberty Media owns a large stake in QVC.