Murdoch talks to fend off Liberty threat

MEDIA magnate Rupert Murdoch says he is still locked in secret talks with rival John Malone as he deals with the potential takeover threat by the Liberty boss.

Murdoch refused to give any details of the talks, nor of how he will fight off the challenge, but said he was confident he would be able to announce a deal with Malone's cable group Liberty Media within three months.

Speaking after announcing News Corp's quarterly results, Murdoch said he has plans for the group's $6bn (£3.14bn) cash pile.

'We've got various alternative ways to deal with that,' he claimed. 'But we're not going to make up our mind to do anything until we resolve the Liberty position.'

Malone took Murdoch by surprise last year when he increased his stake in News Corp to 18%. Murdoch responded by setting up a 'poison pill' defence that would dilute Liberty's shareholding in the event of a hostile takeover bid.

But the Liberty boss's big presence on the share register has been a thorn in Murdoch's side and has caused the News Corp share price to languish.

Murdoch has previously said he was confident of reaching a friendly deal with Malone, but his comments fell short of the definitive answer investors had been seeking.

News Corp posted an 8% drop in profit for the third quarter. Net earnings fell to $400m, or 13 cents a share, from $434m, or 15 cents a share, this time last year - well short of the 17 cents anticipated by Wall Street analysts. Revenue rose 17% to $6bn.