Liberty's News Corp. Purchase `Friendly,' Investor Group Says

Nov. 7 (Bloomberg) -- Liberty Media Corp.'s $1.5 billion plan to raise its stake in Rupert Murdoch's News Corp. is likely to be friendly rather than a sign of a hostile takeover, the Australian Council of Superannuation Investors said.

Liberty Media, controlled by cable-television investor John Malone, this month said it may buy voting stock in the world's fifth-largest media company from Merrill Lynch & Co. in April, 2005, raising its voting stake to 17 percent from 9.2 percent.

"I think you have to say it is more likely to be friendly, than hostile, and more likely to be worked out in some ways to be mutually beneficial," Michael O'Sullivan, president of the Australian Council of Superannuation Investors, told Nine Network's Business Sunday program. The group represents 32 Australian pension funds managing A$85 billion ($62 billion).

The purchase is subject to the completion of News Corp.'s plan to move its official headquarters to the U.S. from Australia. The Australian Council of Superannuation Investors has opposed that move on concern that it will erode shareholders' rights. Murdoch has pledged to protect minority shareholders and agreed to abide by Australian takeover rules.

O'Sullivan said News Corp. had "consistently denied" that the company plans to ally with Liberty Media during talks on moving to the U.S.

The Murdoch family will own 29.5 percent of News Corp. after the relocation. Murdoch said Nov. 3 that he wasn't "losing any sleep" over Liberty Media's planned stake increase.

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