Liberty to Up Stake in Shopping Network : Media: The cable TV channel has been hit by reports of alleged financial misdeeds involving its executives.

Liberty Media Corp., seeking to quell investor fears over a widening government investigation into alleged financial misdeeds at Home Shopping Network, on Monday unveiled a revised $105-million bid to boost its stake to 40% in the cable TV channel.

The move comes nine days after Liberty withdrew a $640-million bid to acquire full ownership of the Clearwater, Fla.-based cable TV channel, after reports surfaced about alleged financial misdeeds by some of the company’s executives.

Liberty’s latest cash offer is an attempt to calm the waters at Home Shopping Network, which has been buffeted by bad news lately.

First, Home Shopping Network posted a $26.9-million loss in the second quarter, leading some analysts to speculate that the cable channel’s financial problems were deeper than they appeared. Then, some major manufacturing firms suspended credit to apparel suppliers who ship merchandise to the cable channel, pending a “clarification” of the recent disclosures.

Liberty, which is affiliated with Denver-based cable TV giant Tele-Communications Inc., already controls 65% of Home Shopping Network’s voting stock and 23% of its equity. Analysts speculated that once Liberty gained full control of the channel it would merge it with its chief rival, Philadelphia-based QVC Networks Inc., in which Liberty also owns a major stake.

Those plans collapsed, however, when reports surfaced in recent weeks of alleged financial improprieties among some of Home Shopping Network’s executives, including Chairman Roy Speer. Among the accusations is that some executives had ties to the Gambino organized crime family.

The company is now the target of a federal grand jury investigation in Tampa, Fla., as well as civil lawsuits charging that Speer and others took and made bribes, as well as unjustly fired a lawyer who tried to alert Liberty to the problems.

The Home Shopping Network executives have denied any wrongdoing.

Under the latest offer, Liberty said it would pay $7 cash each for 15 million additional shares of Home Shopping Network stock. Liberty already owns about 20 million HSN shares.

“By increasing our investment in HSN at this time, Liberty is making a profound statement of confidence (in the) management of HSN. . . . We hope this puts the unfounded anxieties about the financial condition of HSN behind us,” Liberty President Peter Barton said.

Home Shopping Network stock soared $1.75 a share Monday to close at $6.25 on the NYSE. Liberty shares eased 12.5 cents a share, to $16.75 on NASDAQ.

Liberty’s decision to boost its stake in Home Shopping Network came only after the company had to fend off rumors last week that Home Shopping Network was teetering toward bankruptcy. Barton called the speculation “unfounded” and said Home Shopping Network has adequate cash on hand to meet its operating requirements.

Still, the events unfolding at Home Shopping Network are largely outside of Liberty’s ability to control. The grand jury investigation reportedly focuses on events that transpired before Liberty became an investor last year. Nonetheless, Liberty is trying to take an active role in running Home Shopping Network--earlier this year it hired Gerald Hogan, a highly regarded former executive with Turner Broadcasting System, to run the cable TV channel.

Analysts expect that Liberty will eventually move to merge Home Shopping Network and QVC into a $2-billion-a-year electronic retailer positioned to take advantage of emerging interactive technology that will offer viewers a wide array of home shopping choices.