Report: Liberty Media Looking To Buy Cablevision's Rainbow Unit

John Malone’s Liberty Media (LCAPA) is in talks to buy Cablevision’s (CVC) Rainbow Media assets, according to a report in the New York Post.

Rainbow’s assets include the cable channels AMC, IFC and WE: Women’s Entertainment. As the story notes, Cablevision’s board has yet to respond to a $27-a-share bid from the Dolan family to take the company private. The story says that “a deal for Rainbow’s programming assets, which also include about 20 high-definition genre cable networks and a smattering of regional sports channels, could easily generate north of $2 billion.”

Liberty already controls the shopping channel QVC and the Starz and Encore movie channels; and the company recently agreed to acquire News Corp.’s (NWS) stake in satellite broadcaster DirecTV (DTV).

David Novosel, an analyst with Gimme Credit, writes in a report this afternoon that he has long felt that Rainbow “does not fit all that well with Cablevision’s core cable operations and would be a likely candidate for disposition to reduce leverage or help pay for the LBO currently proposed.”

Cablevision today rose 16 cents to $28.64; the stock has gained another 48 cents, to $29.12, in after hours trading. Liberty Media shares today fell 49 cents to $97.49.