(FORTUNE Magazine) – WHEN MOGULS DECIDE TO RETIRE, IT'S usually pretty simple. They announce their intentions, throw themselves a testimonial, and exit the stage. Not John Malone.

Then again, nothing Malone does is simple--not even close. A Ph.D. in electrical engineering, Dr. Malone, as he calls himself, has become well known for arcane financial engineering during three decades of building, buying, and selling cable and technology assets. So it's no wonder that the media world is buzzing about his plans to increase his voting stake in Rupert Murdoch's News Corp. empire.

Some speculate that Malone is maneuvering to launch a takeover of News Corp. when the 73-year-old Murdoch departs. Don't rule it out, but what's much more likely is that Malone, 63, would like to dismantle Liberty Media, his mishmash of a holding company. Again, rather than do the obvious--put up a FOR SALE sign--Malone may try and use his News Corp. stake, which will grow from 9% to 17%, to pressure Murdoch to pay a premium for Liberty assets.

Malone has to do something. Liberty, as now constituted, has little reason for being. It owns QVC, the Encore and Starz! movie networks, stakes in Discovery Communications, Court TV, GSN (formerly the Game Show Network), DMX Music, and MacNeil/Lehrer Productions, shares of tech companies Net2Phone and Wild Blue, and slivers of Time Warner [FORTUNE's parent company], Sprint, Motorola, Interactive Corp., Viacom, and News Corp. Since Liberty was split off from AT&T in August 2001, its share price has fallen from more than $13 to less than $10, although shareholders also got a one-time stock dividend now worth about $2, paid when Liberty spun off some international cable assets.

Malone is mum about his plans. But Robert "Dob" Bennett, Liberty's chief executive, says the company has no hidden agenda vis-à-vis News Corp. He told analysts that Liberty simply wants to take advantage of the narrowing spread between voting and nonvoting shares of News Corp. as the media giant exits its native Australia and reincorporates in the United States. That created a unique opportunity to trade nonvoting for voting shares. "We have no hostile intentions," said Bennett. "We are a large, happy, friendly family."

Murdoch apparently disagrees: He's asking News Corp. shareholders to adopt a "poison pill" to fend off a hostile takeover. If Murdoch won't bite, Malone is likely to try to sell to other bidders, including Comcast, Viacom, and Time Warner. One thing's for sure: With this actor, a plot twist is virtually guaranteed. -- Marc Gunther