GM Unit Dithers Over DirecTV Sale

04 December 2000

Despite seemingly endless speculation, Rupert Murdoch appears no closer to acquring leading US satellite broadcaster DirecTV.

Murdoch, who has said it would be “a dream” to buy DirecTV, wants to add the operator to his worldwide satellite TV subsidiary Sky Global.

However, General Motors, owner of Hughes Electronics which controls DirecTV, has declared that although “ongoing negotiations continue in a very deliberate and planned way”, it will not “allow itself to be stampeded”.

One of the stumbling blocks seems to be GM’s determination to win about $8bn in cash from the deal. NewsCorp is consequently trying to negotiate a deal involving reversing some of Sky Global’s assets into Hughes Electronics. Murdoch may have to turn to Sky Global investors such as Microsoft and Liberty Media to supply him with the necessary funds.

However, despite GM’s procrastinations, Murdoch remains clear favourite to acquire DirecTV. Commented Liberty Media’s John Malone: “Rupert is the most likely acquirer of DirecTV. If he does not buy Direct, he will buy [rival satellite operator] Echostar …and he will trash Direct in a way only Rupert can”.

News source: Financial Times