FTC Staff Seeks to Halt QVC Takeover Deal : Media: Tele-Communications and Comcast vow to complete their $1.4-billion acquisition of the home shopping network.

The Federal Trade Commission staff is seeking to bar the acquisition of QVC Inc. by Tele-Communications Inc. and Comcast Corp., contending that the $1.42-billion deal would give TCI too much market power in the home shopping industry, industry sources said Thursday.

The FTC staff may also seek to force TCI, the nation’s largest cable company, to sell its 23% stake in the QVC home shopping network, sources said.

However, TCI on Thursday was preparing to give the government 10 days notice that it intends to consummate its acquisition of QVC by late February. TCI executives, an industry source said, plan to meet with FTC commissioners next week to plead their case.

If unsuccessful, the source said, TCI plans to fight the agency in court and has the backing of Comcast for the battle. It was Comcast that initiated the takeover bid for QVC last summer, and Comcast will be the controlling partner with 57% of QVC if the deal is completed.

“FTC staff’s position on legal and factual issues at stake here is simply wrong,” TCI said in a statement. “We are hopeful this matter can be resolved successfully with the commission itself.”

“The government has every right to investigate the matter, but this is torture,” QVC Chairman Barry Diller said in an interview Thursday. He said QVC shareholders have lost four months of interest on money they would have received if the deal had closed as originally scheduled.

To take effect, any FTC staff recommendation regarding the QVC purchase would need the approval of the five FTC commissioners. Many analysts expect final action would be delayed until the Senate confirmation of Robert Pitofsky, the Clinton Administration’s nominee for FTC chairman.

The FTC staff is still in talks with TCI and Comcast and hasn’t made a formal recommendation to the commission. In recent years--particularly in the case of the FTC’s protracted antitrust review of software giant Microsoft--the FTC staff has frequently recommended more harsh action than was ultimately taken by the commission.

The FTC staff is concerned that the acquisition would give TCI too much control over the already-concentrated cable home shopping business. TCI has a 70% voting stake in QVC rival Home Shopping Network Inc., which controls about 50% of the home shopping market. QVC controls the other half.

The FTC has also reportedly voiced concern that TCI and Comcast--which together control access to about a quarter of the nation’s homes wired for cable--might deny rival home shopping channels access to their cable subscribers.

“We are glad that the Federal Trade Commission is looking into this,” said Bradley Stillman, legislative director of the Consumer Federation of America, a Washington consumer group that lobbies on cable issues. “This could be a very potent and dangerous (business) combination.”

QVC stock fell $1.625 per share to close at $42.875 on Thursday. Shares of Denver-based TCI were unchanged at $22.25 while Comcast slipped 25 cents to $15.

In early August, West Chester, Pa.-based QVC agreed to be acquired by Comcast and Liberty Media Corp., a TCI unit, for $46 a share in cash.

PaineWebber Inc. analyst Craig Bibb said that if the FTC moves to block TCI’s role in the acquisition, Comcast is likely to seek a new partner and perhaps a larger share of QVC.

But a source close to Comcast insisted Thursday that the Philadelphia-based company is prepared to tough out any court battle on behalf of TCI.

Any staff recommendation to block TCI’s acquisition of QVC would be yet another setback to QVC Chairman Diller.

Once pursued by autograph hounds who treated him as a business rock star following his departure from the Fox television network, Diller has been unsuccessful in brokering a new entertainment venture to rival the success and clout he enjoyed at Fox.

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Shiver reported from Washington and Harris from Los Angeles. Bloomberg Business News contributed to this report.