updated 12/7/2006 9:20:33 AM ET 2006-12-07T14:20:33

News Corp. and its second-biggest shareholder, Liberty Media Corp. are close to a deal that will solidify News Corp. Chairman Rupert Murdoch’s control of his company, media reports said on Thursday.

The Wall Street Journal, citing people close to the situation, said on its Web site that under an agreement which could be finalized in the next few weeks, News Corp. will buy Liberty’s $11 billion stake in the media giant in exchange for News Corp’s 38.6 percent stake in satellite-TV firm DirecTV Group Inc., some cash and some smaller News Corp. assets.

While the two sides have been discussing a deal along these lines for several months, significant progress has been made this week, the WSJ said, citing people close to the situation.

The New York Times reported that Murdoch and Liberty Media Chairman John Malone privately struck a deal this week that would have Malone take the DirecTV satellite service plus other assets in exchange for selling his stake in News Corp to the company.

Malone’s Liberty Media is to take Murdoch’s stake in DirecTV as well as three regional sports networks owned by the News Corporation’s Fox subsidiary, plus some $550 million in cash, the New York Times said, citing a banker briefed on the terms.

News Corp. would simultaneously retire Liberty’s 19-percent voting stake and 15 percent non-voting interest in what amounts to a huge share buyback, the New York Times said.

The NY Times said that a full legal agreement is expected to be signed and announced within two weeks.

The two media companies have previously said they were considering swapping News Corp.’s controlling stake in top U.S. satellite television provider DirecTV for the shares, although no agreements have been completed.

News Corp. said on Monday it was “optimistic” over reaching a deal to buy back or swap Liberty’s shares in the company. “We would not let it drag on so long that it would affect the business,” Reuters reported News Corp. Chief Operating Officer Peter Chernin as saying at a UBS media and communications conference in New York, speaking about the talks over DirecTV with Liberty Media Chairman John Malone.

Liberty Media and News Corp were not immediately available for comment.

Copyright 2012 Thomson Reuters. Click for restrictions.


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