Bennett: Liberty Eyeing DirecTV, VUE

New York -- Liberty Media Corp. is in the mood for acquisitions, and it could make runs at DirecTV Inc. with News Corp., as well as at Vivendi Universal Entertainment, president Robert Bennett told investors and analysts at an industry conference here Tuesday.

Speaking at the UBS Warburg LLC Media Conference, Bennett said Liberty would be interested in talking with DirecTV, as well as VUE, the U.S.-based programming arm of Vivendi Universal.

DirecTV is essentially in play after EchoStar Communications Corp. and Hughes Electronics Corp., DirecTV's parent, officially scuttled their merger plans Tuesday morning.

Liberty had been a partner of News Corp.'s failed bid to buy DirecTV last year. Liberty has said in the past that it would like to help News Corp. in another bid for the direct-broadcast satellite giant or go after it alone.

While Bennett continued to leave those two possibilities open, he appeared to be leaning toward partnering with News Corp. on a deal.

"We've looked at it both ways," Bennett said at the conference. "With News Corp., given our ownership interest, we would hope to find a way of working together."

Liberty owns about 18 percent of News Corp. stock.

"In both cases [DirecTV and VUE], we are conceptually and specifically interested in pursuing conversations with these companies about how to acquire them or acquire a substantial stake in them, he added.

Bennett seemed especially high on satellite.

"With satellite, they are free-cash-flow-positive, and they continue to have superior growth dynamics," Bennett said. "And it fits well with our other content interests."

Liberty has also been rumored to be working with VUE chairman Barry Diller on a possible deal to acquire VUE. One scenario has Liberty contributing its Starz Encore Group LLC premium networks to VUE, which would then be spun out into a separate public company.

While Bennett said he is still interested in talking with Vivendi, he added that any deal including Starz would require Liberty taking a controlling stake.

"For us to be interested in a transaction where we put Starz into a business, we would want to be the primary shareholder in that entity, or at least the leading shareholder," he added. "If that is not an opportunity, it probably is not something we are going to pursue."

Vivendi, which owns the majority of VUE, has hinted that it could possibly spin out the unit, but it has expressed an interest in retaining its controlling interest.

Last month, oil billionaire Marvin Davis made a $20 billion unsolicited offer for VUE, which Vivendi rejected as too low.