NEW YORK (CNNfn) - Two of the biggest names in global media, John Malone and Rupert Murdoch, are nearing a deal that would give Malone a 20 percent stake in News Corp., the owner of such properties as Fox Entertainment Group and the Los Angeles Dodgers, according to a published report Friday.|
The transaction, first reported in the Financial Times, is designed to strengthen Murdoch's hand in his long-running bid to acquire Hughes Electronics Corp. (GMH: Research, Estimates), the fast-growing satellite division of General Motors Corp.
Vivian Carr, a spokeswoman with Liberty Media, declined to comment on the report. A News Corp. spokesman was not immediately available.
The Financial Times said terms of the agreement call for Malone to transfer his 21.5 percent stake in Gemstar-TV Guide International (GMST: Research, Estimates), currently worth about $6.77 billion, to News Corp., which owns a similar stake.
In exchange, Murdoch, who controls about 30 percent of News Corp.'s outstanding shares, would give Malone a 13 percent stake in his company, currently worth about $6.47 billion, the paper said.
Malone, the chairman of Liberty Media Group, currently owns 7 percent of News Corp. (NWS: Research, Estimates), potentially giving him a 20 percent interest in the company worth nearly $10 billion. The FT said Malone would get Class A News Corp. stock rather than the voting Class B shares.
The agreement would strengthen Murdoch's play for Direct TV, the No. 1 U.S. satellite television broadcaster, the newspaper said. Direct TV is a division of Hughes Electronics.
Gemstar is best known for its VCR Plus product that allows customers to punch a code rather than use a VCR timer to record programs. The company also distributes satellite programming through its Superstar/Netlink Group.
Murdoch has long been rumored to be interested in Hughes, and rumors of a Murdoch/Malone alliance stretch back nearly two years.
The Australia-based News Corp. already owns an empire of satellite holdings in Asia, Latin America and Europe, and a move for Hughes would offer a key acquisition in North America, the only remaining hole in the company's portfolio.
A Hughes spokesman declined to comment on the report.