Well, Rupert gets his wish. This should be good news for GMST(E), as Murdoch and partners should expand Guide use and upgrade some systems. We will see.
NEW YORK — News Corp. Ltd. (NWS) Chairman Rupert Murdoch on Wednesday announced his company had become the majority owner of Hughes Electronics Corp. and its DirecTV service, the nation's largest satellite television provider.
The proposed deal would give News Corp. access to DirectTV's more than 11 million subscribers and end a three-year effort by Murdoch to gain a U.S. outlet for his satellite services.
"News Corporation, General Motors (GM) and Hughes Electronics (GMH) reached a definitive agreement in which News Corp. would acquire GM's 19.9% stake in Hughes and a further 14.1% of Hughes from public shareholders and GM's pension and other benefit plans," News Corp. said in a statement.
News Corp. is the parent company of the Fox News Channel, which operates FOXNews.com.
"At closing, News Corp.'s 34% ownership interest will be transferred to Fox Entertainment Group, Inc. (FOX), an 80.6%-owned News Corp. subsidiary, in exchange for a $4.5 billion promissory note and approximately 74.2 million shares in Fox at $27.99 per share, increasing News Corp.'s equity interest in FEG to approximately 82%," the statement also said.
News Corp. will pay about $14 per share, making the deal worth about $6.6 billion.
News of the deal came one day after telecommunications provider SBC Communications (SBC ) broke off talks with DirecTV parent Hughes Electronics Corp.
That left News Corp., which already has interests in Fox film and TV properties in the United States, British Sky Broadcasting in Britain and various Sky-branded and TV operations in Asia and Europe, the apparent lone bidder for DirecTV.
Hughes is a wholly owned subsidiary of automaker General Motors, but trades as a tracking stock that is 20 percent controlled by GM.
DirecTV was put back on the sales block earlier this year when rival satellite TV service EchoStar Communications Corp. (DISH) ended a more-than-year-long effort to acquire the company after running into U.S. regulatory problems.
DirecTV, with just over 11.2 million subscribers at the end of 2002, has been one of Hughes' primary growth engines. In the fourth quarter of 2002, DirecTV saw its revenues climb over 19 percent from the previous year to $1.8 billion.
Quarterly earnings before interest, taxes, depreciation and amortization, EBITDA, more than tripled |
