The increasingly tortuous saga of America’s biggest satellite TV broadcaster DirecTV has taken yet another twist with the resignation late last week of Michael Smith, chairman of DirecTV’s parent Hughes Electronics.
Smith’s sudden decision that it was “time to move on” will not be mourned by Rupert Murdoch, chairman of NewsCorp, who has been trying to secure the purchase of DirecTV for months. Smith has been at the heart of resistance to the bid, stirring investor opposition and even setting out to recruit alternative bidders [WAMN: 12-Mar-01].
“This is the most positive thing that could possibly have happened,” rejoiced one NewsCorp executive. Smith has been replaced by Harry Pearce, previously vice chairman of General Motors (Hughes’ parent) and regarded by some as pro-Murdoch.
This latest development – which, it is thought, will expedite a Murdoch purchase – is expected to force the hand of Charlie Ergen, chief executive at DirecTV’s satellite rival EchoStar, into making a rival offer within days. Ergen last week convinced GM to discuss a potential bid from the broadcaster, though the source of the necessary funds is as yet unknown [WAMN: 25-May-01].
News source: Financial Times