FCC poised to approve Liberty-DirecTV deal: source

WASHINGTON Thu Feb 21, 2008 3:59pm EST

WASHINGTON (Reuters) - The Federal Communications Commission is poised to approve Liberty Media's acquisition of News Corp's stake in DirecTV, a source familiar with the commission's deliberations said on Thursday.

A majority of the FCC's five commissioners are supporting a proposal to approve the deal, subject to a handful of regulatory conditions designed to preserve competition, the source said.

The agency is expected to take formal action within the next several days.

News Corp struck a deal in December 2006 to swap its controlling stake in top U.S. satellite television provider DirecTV Group Inc. for Liberty Media Holding Corp.'s stake in News Corp., which the companies had earlier expected to close in the second half of 2007.

The deal calls for News Corp to transfer its controlling stake in DirecTV, $550 million in cash and three regional sports networks for Liberty Media's 16.3 percent stake in News Corp.

The transaction amounts to an $11 billion stock buyback for News Corp.

The deal ends two years of negotiations between long-time associates and rivals. News Corp Chief Executive Rupert Murdoch and Liberty Media Chairman John Malone, who once helped rescue News Corp from near bankruptcy.

FCC Chairman Kevin Martin earlier this month proposed that the commission approve the Liberty-DirecTV deal. As part of the approval, he said conditions imposed on News Corp in connection with the DirecTV stake should remain in force after the deal. He also proposed a requirement that Liberty sell its cable systems in Puerto Rico.

(Reporting by Peter Kaplan; Editing by Tim Dobbyn)

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