As Rupert Murdoch’s dream of buying US satellite company DirecTV seems to be fading, the latter’s smaller rival Echostar has reportedly proposed a possible bid of its own.
The news adds a further twist to the ongoing saga of the DirecTV takeover. It seemed as if Murdoch’s NewsCorp was destined to win the broadcaster’s hand until management at Hughes Electronics, the General Motors subsidiary that incorporates DirecTV, objected to handing over control without receiving a premium [WAMN: 07-Feb-01; 12-Mar-01].
To complete the bizarre love triangle, Echostar has itself recently been in talks with Murdoch about a possible takeover by NewsCorp, which sees it as an alternative to DirecTV as a foot in the door of the US satellite market.
Echostar’s overtures to Hughes, made by chairman Charles Ergin, have apparently been rejected. The latest suitor for DirecTV’s hand refused to comment on its approach, admitting only that “the synergies would be great.” Whether antitrust authorities would share a similarly optimistic view on a merger which could dominate the US satellite market remains to be seen – regulatory anxiety, say some observers, could dissuade GM from following up an Echostar bid.
News source: Financial Times