Liberty Media Move May Force QVC Sale

From Bloomberg News

Liberty Media Corp., the media-investment company controlled by billionaire John Malone, said Monday that it would exercise an option that may trigger the sale of the QVC home-shopping network it owns with Comcast Corp.

Either Liberty, Comcast or a third party can buy QVC under the option.

Comcast is more likely to consider a purchase than Liberty, which could use sale proceeds to finance acquisitions, analysts said. Comcast, the biggest U.S. cable-television company, may want to buy QVC to get the cash it generates to pay for capital improvements, they said.

Liberty may be trying to raise capital for the possible purchase of Hughes Electronics Corp.'s DirecTV, the biggest U.S. satellite-TV company. Liberty Chief Executive Robert Bennett said in December that his company was considering just such a bid.

"Comcast will probably want QVC, but they can't pay cash for it without unduly stressing their balance sheet," said Matthew Harrigan, an analyst with Janco Partners Inc., who rates Liberty a "strong buy" and owns shares in the company. He rates Comcast "buy" and doesn't own shares in it.

"DirecTV is No. 1 on the shopping list" for Liberty, he said.

QVC, which sells products such as jewelry and consumer electronics endorsed by celebrities such as comedian Joan Rivers and entertainer Marie Osmond, could fetch $10 billion to $19 billion, analysts said. Potential third-party buyers include Barry Diller, the chief executive of USA Interactive, which owns rival Home Shopping Network, Harrigan said. Diller ran QVC from 1992 to 1994.

USA Interactive spokesman Ron Sato declined to comment on whether the company has any interest in buying QVC.

Liberty and Comcast have 30 days to agree on QVC's value, Liberty said. Comcast then must either buy Liberty's stake or sell the cable-TV network, which is available in 84 million U.S. homes. Liberty may buy Comcast's interest at that point, or the companies can seek an outside buyer.

Philadelphia-based Comcast is under pressure to reduce debt after buying AT&T; Corp.'s cable business last year for $58.7 billion. Comcast and Tele-Communications Inc., the former parent company of Liberty Media, bought QVC in 1995.

QVC's fourth-quarter sales were $1.38 billion, 9.5% higher than a year earlier, according to Comcast.

Shares of Englewood, Colo.-based Liberty rose 12 cents, to $9.31, on the New York Stock Exchange. Comcast Class A shares fell 78 cents to $28.44 on Nasdaq.

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