Malone to pull up stake in OpenTV

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NEW YORK -- John Malone's Liberty Media has agreed to sell a controlling stake in interactive and digital TV firm OpenTV Corp. to Switzerland's Kudelski Group for $132.3 million.

Analysts hailed the deal as a chance for the companies, which have increasingly worked together, to better compete with News Corp.-controlled NDS Group.

B. Riley & Co. analyst Ali Mogharabi said the sale is no sign that Malone is down on the prospect's of interactive TV. "I think he's refocusing" to concentrate on core operating assets, he said.

Craig-Hallum Capital Group analyst Anthony Stoss added that "the combined suite of offerings allows the companies to compete more effectively against NDS."

Kudelski's offerings include Nagravision, a provider of integrated security software for digital TV. The firms have cooperated on personal-video recorder, video-on-demand, interactive programming guides and other services.

Kudelski will acquire an economic stake of about 27% in OpenTV, which amounts to a 75% voting stake. Liberty is expected to pay OpenTV as much as $19.7 million, or 71.4% of the deal premium, consistent with an existing agreement between the firms.

OpenTV chairman and CEO James Chiddix said the deal brings opportunities "to bundle solutions, sell products into Kudelski's existing customer base, save costs through various integration and joint (research and development) efforts and collaborate more effectively in several early stage sectors, such as the digital terrestrial market."

Kudelski chairman and CEO Andre Kudelski said that with digital TV households expected to double by 2010 and the mobile and online video sectors quickly evolving, "we see OpenTV as extremely well-positioned to exploit these opportunities."

Once the deal closes, Kudelski said it expects to appoint Alan Guggenheim, CEO of NagraStar, as OpenTV's new CEO. Chiddix is expected to assume the role of vice chairman, with Kudelski to be appointed chairman.

Alexander Woodson contributed to this report.
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