MURDOCH REPORTEDLY CLOSE TO FINALIZING DIRECTV DEAL
GM and News Corp. are refusing to comment on reports that Rupert Murdoch is close to finalizing $70 billion deal to buy DirecTV. New company would become largest DBS company in world. News Corp. satellite unit Sky Global reportedly is valued at $35- $45 billion. With industry speculation rampant, GM spokesman cautioned that “no agreements had been reached” and company “remained in talks with more than one interested party” for sale of Hughes Electronics and DirecTV. If deal were to be made, boards of each company would have to approve along with regulatory agencies. Sale could run into antitrust problems and other snags, industry sources said, “but the 2 sides appear to be real close.” However, at our deadline, no deal had been announced and source said no announcement of deal “could be expected” for at least 2 weeks.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Regular GM board meeting was held Tues. for update on Hughes talks, spokesman said. News Corp. spokesman declined to speculate on deal: “We don’t have any comment other than to say we have made no secret of our interest in DirecTV and we have made no secret of our talks with Hughes.” Hughes spokesman also declined comment and would say only that GM and Hughes had been “exploring options on what to do with Hughes” since last year: “We've said all along, that yes, talks are under way, but we don’t go into any details of elements of the talks.” He reiterated that “multiple parties” still were interested, but “we've never acknowledged who any of them are.”
Deal with News Corp. would lead to $7-$8 billion spinoff of PanAmSat by Hughes in effort to raise additional cash, industry sources said. SES Astra already has expressed interested in acquiring commercial satellite operation (CD Jan 29 p3).
Merger of new company led by Murdoch also could result in Hughes shareholders’ keeping 65% stake and bundling of broadband services, including Internet. Under preliminary terms of agreement, GM would spin off Hughes as independent company before merging with News Corp. satellite unit Sky Global. Muddying picture has been impatience of Murdoch, who desperately wants to get deal done, despite fact News Corp. doesn’t have cash to finalize agreement (CD Dec 27 p2), source said. That’s big reason Microsoft was brought in, source added.