Liberty looks to bond sale

John Malone's Liberty Media has stepped up its acquisition ambitions by announcing a plan to raise up to £1.1bn in extra funds.

The money would be released through 20-year bonds ultimately exchangeable for some of Liberty's 4% stake in AOL Time Warner.

Liberty's share in the media combine is currently worth £2bn and it could use the money raised from the bond sale to bid for a number of possible targets. These could include the remainder of shopping channel QVC, the US entertainment assets of Vivendi Universal or US satellite broadcaster DirecTV - also an acquisition target of Rupert Murdoch's News Corporation.

"There was an opportunity to sell these debentures at attractive prices and we have additional liquidity to pursue some of the transactions we're looking at," Liberty spokesman Mike Erickson said.

"If none of those transactions occur, we have additional cash we can put to use elsewhere."

The timing of Liberty's move coincides with uncertainty about the future of QVC, in which Liberty has a 42% stake. Liberty announced on March 3 that it would unwind its partnership in QVC with cable operator Comcast, in order to allow both companies to consider their options.

Liberty's plan also comes just two days after News Corp announced a similar $1.35bn bond-share swap, effectively remortgaging its stake in BskyB, and could herald a battle for DirecTV - the US's largest satellite broadcaster with 17m viewers.

News Corporation has long set its sights on DirecTV and last month dropped its plans for a joint bid with Liberty, whose boss, Mr Malone, is an ally of Mr Murdoch and the second largest shareholder in News Corp after the Murdoch family.

Mr Murdoch is now thought to be focusing his energies on a solo deal, and covets DirecTV as the potential missing piece in his dream of creating a global satellite broadcasting business. He has referred to it as "the big exception" to his present policy of eschewing deals.

Last year regulators blocked a bid from Charlie Ergen's Echostar for DirecTV - which is owned by Hughes Electronics, in which General Motors has a 30% stake.