Global media mogul Rupert Murdoch could yet see the biggest deal of his career – the $70 billion purchase of satellite broadcaster DirecTV – slip through his fingers.
Talks between NewsCorp and DirecTV’s owner, auto manufacturer General Motors, appear to have stalled and LibertyMedia boss John Malone, also a shareholder in the Murdoch empire, says he believes they may collapse. Meanwhile, both parties have floated the idea of negotiating with others – Murdoch hinting at a possible purchase of DirecTV’s rival Echostar.
The Newscorp chairman, who celebrated his seventieth birthday yesterday, has been lining up the DirecTV deal for months and once described it as a “dream”. Early in February he seemed on the verge of an agreement which would have delivered the satellite broadcaster into his hands [WAMN: 07-Feb-01]. Leaked details of the proposed pact revealed that NewsCorp planned to merge its Sky Global satellite group assets into a new, combined business encompassing DirecTV.
However, these leaks may have helped cause the current impasse. It is believed that GM executives became anxious over whether Michael Smith – chairman of Hughes Electronics, the GM subsidiary which owns DirecTV – would sign up to the deal after the details were let slip. “He [Smith] was going to be jobless without getting a premium for his stock,” explained one insider.
Since then, Hughes executives have revealed that Smith has been talking to other bidders. GM, meanwhile, is keeping tight-lipped on the status of negotiations. “We are looking at the full spectrum of options before us,” the company conceded yesterday.
News source: Financial Times