Liberty's Malone: Sure, We'd Swap Time Warner (TWX) Stake For AOL Dialup

Now that Time Warner (TWX) is prepared to split AOL’s dialup business away from its advertising and content business, does Jeff Bewkes have a potential buyer in Liberty Media’s John Malone?

Probably. During Liberty’s (LINTA) earnings call Monday, Malone said he’d be open to discussing a deal to swap his stake in Time Warner (TWX) for AOL’s declining — but cash-generating — dialup business, Reuters’ Ken Li reports.

“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.

In May, Citigroup’s Jason Bazinet pitched the tie-up, predicting a “40% chance” that Liberty would end up taking AOL’s dialup business off Time Warner’s hands.

What doesn’t a Liberty-AOL deal do? Move along consolidation in the dialup biz — though United Online (UNTD), EarthLink (ELNK), and Microsoft’s (MSFT) MSN are ripe for the taking if Malone wants a side deal or a rollup.

See Also:
Time Warner Preps AOL For Potential Dialup, Advertising Deals
Does Liberty Want AOL Dial-Up Biz Time Warner Doesn’t Want To Sell?
EarthLink Q2 Strong, Looking For Deals

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