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Bonds News

UPDATE 1-QVC, HSN combination hinges on valuation-Malone

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NEW YORK, Sept 21 (Reuters) - Liberty Media Chairman John Malone said on Friday discussions to merge his QVC cable television and Internet shopping network with rival HSN was hung up on “valuations,” not antitrust concerns.

Shares of Liberty Interactive LINTA.O stock, under which QVC is housed, fell nearly 4 percent before ending down 50 cents, or 2.66 percent, at $18.28 on Nasdaq.

Some investors had hoped for the combination of QVC and HSN, which would solve two issues -- create a shopping powerhouse and help transform Liberty's passive stake in HSN parent company IAC/InterActiveCorp IACI.O.

But Malone said HSN’s downturn made it less attractive financially. “Do you really want to trade out of a growth vehicle into a non-growth vehicle that has challenges?” he told investors at Liberty Media’s annual analyst day presentation.

Liberty has said it plans to simplify its structure and "rationalize" or swap out non-operating assets, such as its stake in Barry Diller's IAC and a stake in Expedia Inc EXPE.O.

In July, Diller told Wall Street that discussions to swap Liberty’s stake in IAC for IAC’s HSN shopping network would likely continue at some point, but the goal was to make HSN more competitive to rival QVC.

Malone said he saw no antitrust barriers to combining the only two cable shopping networks, answering an investor’s question.

“There never have been any,” Malone said of antitrust concerns. “We’re the controlling shareholders of HSN anyway.”

Liberty Media owns a 24 percent stake in HSN parent IAC, and holds a roughly 55 percent voting interest, according to Liberty’s Web site.

Separately, Liberty Media Chief Executive Greg Maffei said on Friday the company plans to raise the debt leverage in its interactive division over the next year as it seeks to expand QVC internationally.

The company, controlled by cable pioneer John Malone, said it planned to raise Liberty Interactive’s ratio of debt to earnings before interest, tax, depreciation and amortization (EBITDA) to 4 to 5 times, from the current 3.6.

“You’ll see us push it up in the period,” Liberty Media Chief Executive Greg Maffei told investors at an analyst meeting in New York.

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