A touch of DirecTV fever seems to have hit investors.

The company is the biggest US satellite operator, and Rupert Murdoch owns a controlling stake in it, a stake that he fought long and hard with regulators to get.

DirecTV has seen its share price rise nearly 20 per cent since it emerged two months ago that Mr Murdoch would consider selling out in a deal with John Malone's Liberty Corp.

The sharp rise exceeds gains at competitors such as EchoStar, and comes in spite of continued pressure on satellite operators from cable and telecom rivals. The reason is that investors believe Mr Malone will either increase his stake in DirecTV, or increase debt at the company and pay them a dividend, or both.

"The focus is on John Malone, erstwhile cable baron now recast as hero to DirecTV shareholders," said Craig Moffett, analyst at Sanford Bernstein.

"We understand the bull arguments - for tax-advantaged special dividends or a buy-in by Mr Malone to operating status - but the risks are considerable that these do not happen."

This week, Liberty said it might sell some of the 39 per cent of DirecTV worth more than $10bn, owned by News Corp, if there was a deal.

Greg Maffei, president and chief executive officer, said: "We could stay at 39 per cent . . . increase our stake, or even sell down to 25.1 per cent."

DirecTV's shares fell slightly on the comments. But strong buying of DirecTV shares by quantative investors, whose "black boxes" indicate DirecTV is attractive after capitalisation changes led to upward earnings revisions, was propping up the shares, analysts said.

"I have had numerous calls from quants [quantative investors] who say they have just bought the shares. Now I can tell them what the company does," said one.

Mr Moffett said Mr Malone could even reverse the capitalisation changes to maximise cashflow. "[This] would result in sharply negative revisions and would punish DirecTV's standing on quant screens," he said.

Mr Murdoch, chairman and chief executive officer of News Corp, has been in talks with Mr Malone, chairman of Liberty Media, for more than two years after Liberty secretly built up a 19 per cent voting stake inNews Corp.

Mr Murdoch, who built News Corp into a global media giant, controls about 30 per cent of the company's voting shares through a family-owned trust.

He wants to make that a majority stake in order to ensure the Murdoch family's long-term control of the company.

Mr Malone's incentive for a deal is to cash in his $11bn News Corp stake without paying tax.

As well as potentially resolving Mr Murdoch's concerns about family control, the fact that DirecTV is up for grabs reflects a shift in the way Mr Murdoch perceives the importance of traditional distribution in a world where digital distribution is becoming increasingly relevant.

On Wednesday, DirecTV reported third quarter results, which showed a decline in new subscribers but an increase in profitability, the opposite of results reported by rival Echostar earlier this week.

"DirecTV shares have performed well given an attractive valuation versus cable, the intensity of its buy-back programme and speculation on strategic activity," said Aryeh Bourkoff, analyst at UBS. "However, satellite is fundamentally challenged over the next several years in an increasingly competitive pay-TV environment. An exchange from News Corp to Liberty Media does not alter that fundamental view."

A deal between Mr Murdoch and Mr Malone might cause the share price fever to cool off.