Chairman of the Liberty Media Corp (NASDAQ:LMCA) (NASDAQ:LMCB) empire John Malone agreed to be interviewed by the Wall Street Journal on Wednesday, July 23rd, while he was in Brussels attending a board meeting of Euro cable firm Liberty Global plc (NASDAQ:LBTYA) (NASDAQ:LBTYB). Malone touched on a wide range of subjects during the interview, but he was not shy in offering his opinions regarding the just-announced Twenty-First Century Fox Inc (NASDAQ:FOXA) – Time Warner Inc (NYSE:TWX) deal.
Size of the deal makes another bid unlikely
John Malone’s first point was pretty obvious — a competing bid for Time Warner Inc (NYSE:TWX) is not likely as there are only a handful of firms who could even contemplate an $80+ billion transaction. “It’s such a large magnitude transaction,” Malone said, pointing out that Twenty-First Century Fox Inc (NASDAQ:FOXA)’s ability to pay with nonvoting stock and access cheap debt means “that it would be very difficult to put together a competitive bid.”
John Malone also mentioned he “doubts” that any large global tech companies would make a bid for a big media business like Time Warner that is still heavily weighted to the U.S.
“Whether it makes sense for them to make what is a very large investment—even for them—in a U.S. domestic business, I would seriously doubt it,” Malone elaborated. “It’s possible there would be enough value in HBO to one of these companies. But that’s really just buying the whole dairy farm to get a quart of milk. I don’t see them going that way.”
Deal highly attractive to Fox
John Malone also highlighted the deal is highly attractive to Twenty-First Century Fox Inc (NASDAQ:FOXA) as it creates significant synergies from a large asset in its home U.S. market. Surprisingly, Malone also said that sports rights are an “important” factor, but “not the driver.”
“I know that the executives at Fox have been analyzing this for a very long time. This is not a sudden interest,” Malone explained. “They’ve been particularly successful in the U.S., so this would be an asset that they would know what to do with, let’s put it that way,” he continued.
John Malone not looking to retire
Later in the interview, John Malone also said that he is not planning to give up on his investment activities any time in the near future. He did say that he might cede his significant voting control of some of the companies he has created, including Liberty Global.
“I intend to be an investor forever, for as long as I’m on this planet Earth,” said John Malone, who turned 73 this year. “My estate is such that it’s in a charitable trust that it will survive me assuming my wife survives me.”
While John Malone said he wouldn’t rule out selling assets, he said that his retirement would most likely come through giving up his supervoting shares in firms where he has found trustworthy successors.
“The likelihood for me is that, if I’m no longer able to take these long flights and activities, that I would swap the high-voting shares for low voting shares,” Malone explained, saying the main idea is to create “continuity” with managers like Liberty Global plc (NASDAQ:LBTYA) (NASDAQ:LBTYB) CEO Mike Fries. “That is what I would dearly love to see happen,” he concluded.