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J.Lo-backed network to buy Madison Square Garden's Fuse TV

(Updates with official announcement of the deal)

April 3 (Reuters) - Latino-focused cable network NUVOtv, backed by Jennifer Lopez, said its parent company SiTV Media Inc would buy Madison Square Garden Co's Fuse TV.

Madison Square Garden will receive $226 million and a 15 percent stake of the combined company and will also gain a seat on the SiTV board.

"It enhances our distribution relationships, dramatically expands our aggregate subscriber base, provides substantial economies of scale, affords unique opportunities for programming and cross-promotion...," NUVOtv Chief Executive Michael Schwimmer said in a statement.

Fuse, an American music television network, reaches about 74 million homes through pay-TV systems including DirecTV and Dish Network Corp.

As part of the acquisition, NUVOtv also plans to utilize Fuse's street front studio on Seventh Avenue in Manhattan - across from Madison Square Garden.

The Dolan family, which spun off Madison Square Garden from Cablevision Systems Corp four years ago, had been asking for about $400 million for Fuse, a Bloomberg report said last month.

NUVOtv made a $200 million cash and stock offer last month.

The offer pitted Lopez, chief creative officer and minority stakeholder of NUVOtv, against her former boyfriend hip-hop star Sean Combs, who had made a bid of about $200 million for Fuse TV.

The deal is expected to close in Madison Square Garden's fiscal 2015 first quarter, ending Sept. 30.

Madison Square Garden shares were down 0.19 percent at $57.13 in morning trading on the Nasdaq on Friday.

(Reporting by Ankush Sharma in Bangalore; Editing by Gopakumar Warrier)