Rupp still does not know what hit him. Don't forget to add in the 2 bil. in tax saving for Liberty. GO JOHN BOY GO.
December 8, 2006 Is Rupert Murdoch stiffing shareholders to cement control of his media empire? That's the risk News Corp.'s investors now face in Mr. Murdoch's planned exchange of assets with John Malone's Liberty Media.
Since the two interests are valued at roughly $11 billion each, this should be an easy swap, right? Perhaps -- but Mr. Murdoch is expected to sweeten the pot by handing Liberty an extra $550 million in cash and three sports cable networks.
That sounds like an awful lot, given the control that News Corp.'s stake confers over DirecTV. Indeed, one could reasonably argue that Mr. Malone should be paying a premium of some $2 billion, or 20% more, to take control of the business.
Why would Mr. Murdoch be willing to forgo this premium from Liberty? For starters, by treating the transaction essentially as a buyback, and retiring Liberty's 188 million shares, Mr. Murdoch increases his control of the company to almost 40%. That's great for him and his children, but it isn't necessarily a win for minority shareholders.