Murdoch nears DirecTV deal
By James Harding, Media Editor
Published: June 15 2001 20:06GMT | Last Updated: June 18 2001 08:35GMT
Taken from the financial times: news.ft.com
Rupert Murdoch has told investors he is close to agreeing a deal that would see him take control of DirecTV, the leading US satellite broadcaster.
The News Corporation chairman also signalled plans to raise further capital by selling to the public a stake in the global satellite TV group he expects to create by acquiring DirecTV.
After almost a year of talks, Mr Murdoch said this week his company was "nearing the end of the process".
He dismissed the threat of a counterbid from Charlie Ergen, chairman of EchoStar, the rival satellite broadcaster seeking to put together an offer.
Investors said they now believed General Motors, which owns a 33 per cent stake in Hughes Electronics, the owner of DirecTV, would only negotiate with Mr Ergen if Mr Murdoch walked away.
Mr Murdoch also signalled intentions to tap the public for funding once the deal with DirecTV was complete.
Mr Murdoch and GM have been discussing a deal that would combine Sky Global, News Corp's collection of digital businesses, with Hughes, which currently trades as a GM tracking stock.
Once the merger is done, Mr Murdoch could sell a stake in the combined business to raise funds to finance DirecTV through to profitability.
Advisers to Mr Murdoch suggested that he might look to raise $4bn-$5bn in order to fund the acquisition of subscribers, technology developments and operational costs.
Mr Murdoch has lined up two strategic partners - Microsoft, the software group, and Liberty Media, the communications investment group - to inject an expected $4bn cash at the time of the combination. |
