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Liberty Sees Starz with IDT Entertainment Deal

After holding on to its stake in telephone-service provider IDT Corp. for more than four years, Liberty Media Corp. is unloading that position, as well as $186 million in cash, for IDT’s animation arm, IDT Entertainment.

According to the deal, Liberty will give up its 17.2 million shares of IDT class-B stock and its 5% equity interest in IDT Telecom, a division of IDT. Liberty will also assume an undisclosed amount of IDT Entertainment’s debt.

IDT shares rose steadily on the news of the most recent Liberty deal, up $2.03 (18.2%) to $13.18 each in afternoon trading Tuesday.

The deal will give Liberty’s Starz Entertainment Group LLC the ability to create its own computer-generated animation programming.

IDT’s first feature animation film -- Everyone’s Hero – The Story of Yankee Irving -- is scheduled to be distributed by Twentieth Century Fox studios Sept. 15.

IDT Entertainment includes five other studios -- Mainframe Entertainment, Manga Entertainment, Anchor Bay Entertainment, DPS Studios and DPS Film Roman -- which produce live-action and animated programming for television, premium cable and home video. Revenue for the unit was about $48.4 million in the fiscal second quarter ended March 31, a 17.8% increase over the previous year.

In addition, on closing, IDT Entertainment and Starz will enter into a five-year programming-output agreement for the broadcast on Starz’s premium channels of certain IDT Entertainment proprietary CG animated theatrical releases and live-action programming.

Liberty first invested in IDT in 2000 before it went public in May 2001. Since then the stock has been as high as $23.80 per share.

In other Liberty news, the board of directors of Liberty Global Inc. authorized a cash self-tender offer to purchase up to 10 million shares of its series-A common stock and up to 10,288,066 shares of its series-C common stock.

The company said it expects to pay a purchase price of $25 per share for series-A common stock and $24.30 for series-C common stock, or an aggregate of $500 million if the tender offer is fully subscribed.

The self-tender offer is expected to commence on or about May 18, and it will remain open for a minimum of 20 business days.

Shares purchased pursuant to the tender offer will not reduce Liberty Global's previously announced stock-repurchase program, which has been suspended in accordance with applicable federal securities laws until after the expiration or earlier termination of the offer.