Rumours of $7bn NewsCorp Bid for DirecTV Spooks Investors

25 March 2003

Shares in Rupert Murdoch’s News Corporation have fallen on concerns that the media colossus will overpay for US satellite firm DirecTV.

NewsCorp’s interest in the American satellite-TV market leader – which Murdoch envisages at the heart of a global pay-TV empire – is old news, but firm details of his latest bid have been few and far between.

Over the weekend, a report in British newspaper The Observer suggested the media baron is putting together a $7 billion (€6.6bn; £4.5bn) offer for DirecTV, which is owned by General Motors unit Hughes Electronics.

This sum is higher than the $5bn bid for a 20% stake in Hughes that analysts were expecting.

As a result, NewsCorp’s stock, listed in Sydney, dipped 3.2% Monday to A$10.92. On Tuesday, they continued falling to A$10.73.

• Separately, NewsCorp’s Asian TV unit Star Group announced plans for a 24-hour news channel in India. Broadcast in Hindi, Star News will hit the airwaves in April and target the country’s 41 million cable-TV homes.

Hong Kong-based Star is Asia’s biggest TV group, transmitting 40 channels in eight languages to 300 million viewers in 53 nations. It is keen to expand in India, which is second only to China in size of market but has far fewer broadcasting curbs.

However, new government rules forbidding foreign firms from holding more than 26% of a news channel may mean Star News is spun off into a separate, Indian-dominated unit.

Data sourced from: multiple sources; additional content by WARC staff