Liberty in Talks to Buy Magness Stake

Malone is currently entitled to vote all of the Magness group's Class B shares.

Shares of Liberty fell 2.6 percent.

Liberty, in a filing with the U.S. Securities and Exchange Commission, also said it had purchased a holding company owned by Malone, TP Investments, for 5.3 million Class B Liberty shares, valued at $60.7 million, giving it larger stakes in Priceline.com Inc. <PCLN.O>, Sprint PCS <PCS.N> and TruePosition Inc., a provider of wireless communications equipment.

The sale of TP Investments and the proposed buyout of the Magness estate shares, would result in reducing Malone's voting stake to 28 percent from 42 percent. Liberty said it would cancel the Magness group shares if the proposed sale is completed.

The company said the deal with Magness's heirs, which involve exchanging 96 million class B shares of Liberty for cash and class A stock, is "preliminary."

Class B shares of Liberty are entitled to 10 votes each, compared to one vote each for Class A shares.

Liberty shares were down 29 cents at $10.70 in early trade on the New York Stock Exchange.

Magness, who founded Tele-Communications Inc. in the 1950s, was Malone's mentor and employer. In 1973, Magness lured a young Malone away from a job at Warner Communications cable division, a move that altered the course of the U.S. media industry.

TCI's systems were later sold to AT&T <T.N>, whose cable assets were purchased by Comcast Corp. <CMCSA.O> in November 2002.