Update: Liberty Media Setting The Stage For HSN Bid?

The evidence suggests that John Malone is setting the stage for an eventual bid for the TV shopping channel HSN (HSNI). As I noted yesterday, Liberty Media this week disclosed that it has increased its stake in the company to 32.8% from 29.5%, via the purchase of 1,872,210 shares at an average price of $4.63. The shares are held by Liberty Interactive (LINTA), a tracking stock which also owns HSN rival QVC.

As I pointed out in my post yesterday, the filing noted that the shares were acquired from a financial institution in a “post-paid forward transaction,” which a Liberty spokesperson explains means that the company had a brokerage firm accumulate the shares, with the understanding that the transaction would be completed once the number of shares targeted had piled up. That explains how the company paid an average $4.63 apiece for the shares in a transaction dated May 14, despite a stock price that is twice that level. Indeed, HSNI shares haven’t actually traded that low since March.

Liberty acquired its original 29.5% stake in HSN via the company’s spin off from IAC/Interactive (IACI). Malone got into a high profile legal shoving match with IACI CEO Barry Diller over that deal; part of the settlement of the spat restricted Liberty from increasing its position in any of the IACI spin offs by more than 5 percentage points - or decreasing their stake by more than 10 percentage points - for a two-year period ending May 2010.

On an earnings conference call in February, Liberty Media CEO Greg Maffei made it clear that while the agreement with IACI prevents Liberty from offering to buy out HSN until May 2010, a combination with QVC was a clear possibility. “Not that saying that we will, but we do believe we are the natural…owner at some point for that company,” Maffei said. “We are the one with the most synergies.” He noted that they had the right to boost their stake to 35%, and that Liberty would “monitor the time and place to do that.”

In response to an inquiry from Tech Trader Daily, HSN CEO Mindy Grossman today issued a statement which more or less evaded the issue. “We can’t speculate on Liberty Media’s intentions,” she said. “Our focus continues to be on growing the company and maximizing shareholder value for the long-term.”

HSNI today rose 50 cents, or 5%, to $10.49. The stock is up 26.5% over the last 5 sessions. The stock is up more than seven-fold since hitting a closing low in December at $1.44.