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Comcast agrees to sell
QVC stake to Liberty
Liberty, which triggered the process in March, holds the outstanding share of QVC and has five days to decide whether to buy Comcast's stake.
John Malone, Liberty Media's chairman, has said he is attracted by QVC's strong cashflow. Under the terms of the deal, Liberty Media can pay with cash, a three year senior unsecured note or up to 218m shares, or 7.5 per cent of its outstanding stock.
Liberty Media shares would be valued at $11.71, about a 2.3 per cent premium on the closing share price of $11.45 on Thursday.
Liberty Media, whose investment portfolio includes stakes in AOL Time Warner, News Corporation and Discovery Communications, is also engaged in a bidding contest for Vivendi Universal's media and entertainment assets.
The purchase of QVC will stretch Liberty Media's resources if the company pays in cash. However, Richard Bilotti, an analyst at Morgan Stanley, estimates that Liberty Media has over $15bn of resources.
For Comcast, the sale of its QVC stake will help the company reduce its debt, which stood at $30bn earlier this year.
Mr Malone is believed to be keen to increase the number of investments Liberty controls to narrow the gap between the company's value and the market value of its assets.
Such a move would also reduce the possibility that US authorities might classify Liberty as an investment trust, which would lead to the company paying more taxes.
QVC, which is valued at more than $14bn, is a 24-hour television shopping channel, based in West Chester, Philadelphia. On any given day, it will attempt to sell about 1,700 items, ranging from jewellery to electronics.
QVC is broadcast in the US, the UK, Germany and Japan. The company has one outlet, in the enormous Mall of America, in Bloomington, Minnesota.
Brian Roberts, Comcast's president and CEO, said on Thursday that the company would focus on its core cable business. "This has been a very difficult decision," he said about the QVC sale. "QVC is an exceptional and unique business, but we took a very disciplined financial approach to our evaluation."
The exact terms of the QVC deal will be determined over the next few weeks, Comcast said. The transaction is subject to regulatory review and Comcast expects it to be closed before the end of the year.
Confirmation of the deal came after the US markets had closed for the Independence Day public holiday on Thursday. Shares of Comcast closed up 14 cents at $30.71.