Liberty Media eyes up AOL deal

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Liberty Media, the serial internet investment company, has revealed an interest in an asset swap that would allow it to take control of AOL, the internet arm of Time Warner that is the subject of disposal talks.

Liberty Chairman John Malone said late yesterday that he would prefer owning cash-generating operating companies rather than minority stakes in larger businesses.

"Clearly an exit from the Time Warner equity state into a cash-generating asset would be attractive, but at the current time, none have been proposed that we could take action on," Malone said on a conference call on quarterly results.

"But we would continue to try and maintain the relationship with Jeff and the Time Warner folks in the event that such a transaction would present itself," he said, referring to Time Warner chief executive Jeffrey Bewkes.

Malone orchestrated a similar deal recently with News Corporation, swapping its stake in the Rupert Murdoch-run business for a controlling stake in US satellite television platform DirecTV.

As of May 2007, Liberty held 103 million shares, or about 2.8 per cent, of Time Warner after it swapped 68.5 million shares for Time Warner's ownership of the Atlanta Braves Major League Baseball team and Leisure Arts group.

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