Liberty Media Corp. (LCAPA, LINTA, LSTZA) signaled a vote of confidence in the just-completed merger of Ticketmaster Entertainment Inc. and Live Nation Inc. (LYV), offering to buy as much as 34.5 million shares of the combined company at a 14% premium.

The media conglomerate controlled by John Malone launched a tender offer Tuesday morning to buy shares of Live Nation for $12 apiece. If fully subscribed, the move will double the company's stake in Live Nation to 35%.

Coming a day after the U.S. Justice Department cleared the merger, requiring tough concessions designed to limit the combined company's competitive clout, Liberty's offer shows Malone and his lieutenants remain confident in Live Nation's prospects as a music industry behemoth.

"This looks like a move to show outside investors that Liberty doesn't think this merger was spoiled by the regulatory process," said Morningstar analyst Warren Miller.

Shares of Live Nation traded up 16.5% on Tuesday to $12.24.

Liberty's move also raised questions about the company's intentions at Live Nation. Malone has a history of taking control of companies in the media and entertainment sector, but the company said in a press release that its tender offer was for "investment purposes only," noting that it's limited from further increasing its stake in the music giant.

Liberty's holdings in Ticketmaster, which was spun off from IAC/InterActiveCorp. (IACI) in 2008, left it with a 15% stake in the combined company when the merger was closed late Monday. Under a shareholder agreement stemming from the IAC spinoff, Liberty is restricted from increasing its stake in Live Nation beyond 35% until August.

After that restriction is lifted, Liberty could buy more shares of Live Nation. Representatives for Liberty and Live Nation couldn't immediately be reached for comment.

Liberty said it will attribute any shares it purchases in the tender offer to its Liberty Capital (LCAPA) group, while the Live Nation shares it currently owns are attributed to its Liberty Interactive (LINTA) group.

Morgan Stanley analyst Benjamin Swinburne said Liberty could transfer the 14.6% stake held at Liberty Interactive to Liberty Capital for an estimated $280 million to $300 million in cash, which would benefit holders of the Liberty Interactive tracking stock.

The approval process for the merger of Live Nation and Ticketmaster was slow, as the prospect of combining two heavyweights in the live-entertainment industry spurred criticism from lawmakers and others. Ticketmaster is the country's largest seller of tickets to concerts, sports games and other live events. Live Nation is another major ticket-seller and runs more than 100 concert venues.

-By Nat Worden, Dow Jones Newswires; 212-416-2472; nat.worden@dowjones.com

(Joan E. Solsman contributed to this story)
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