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News > Companies
News Corp. eyes Hughes
March 23, 2000: 3:56 p.m. ET

Source: Murdoch's media empire mulling bid for GM unit and owner of DirecTV
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NEW YORK (CNN) - Rupert Murdoch's News Corp. Ltd. may make an offer for Hughes Electronics Corp., owner of the hot satellite television provider DirecTV, a source close to News Corp.'s internal talks said Thursday.
    News Corp. has been considering a move for Hughes -- a wholly owned subsidiary of General Motors Corp. -- for about one year, the source said. The Australia-based media conglomerate already owns an empire of satellite holdings in Asia, Latin America and Europe, and a move for Hughes would offer a key acquisition in North America.
    General Motors and Hughes declined to comment. However, many market observers are expecting News Corp. to spin off its satellite holdings into a separately traded company as a way to unlock the segment's value.
    graphicAn earlier report Thursday said Murdoch and John Malone's Liberty Media, a unit of AT&T Corp., are considering a bid for General Motors altogether to nab control of Hughes' satellite assets. A News Corp. spokesman said the report was "entirely false and without merit."
    Shares of Hughes (GMH: Research, Estimates) jumped 15-9/16, or 12 percent, to 140. General Motors (GM: Research, Estimates), one of 30 stocks in the Dow Jones industrial average, added 5-1/4 to 87. The American depositary shares of News Corp. (NWS: Research, Estimates) fell 1-3/4 to 61-7/16.
    Based on that closing price, GM has a market value of about $54 billion.
    
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    CIBC Oppenheimer analyst Jeffrey Wlodarczak said GM would be well served to pair with News Corp.'s satellite assets, which he said would merit a market value of roughly $35 billion. Such a pairing would create the world's preeminent satellite company, he said.
    "Whether it's true or not, it highlights the value of these assets," Wlodarczak said, referring to the report. He currently has a "strong buy" rating on Hughes shares.
    Other satellite companies also rallied. Hughes rival EchoStar Communications  (DISH: Research, Estimates) rose 10-7/32, or roughly 13 percent, to 72-13/16.
    Hughes recently sold its satellite manufacturing operations to aerospace giant Boeing for $3.75 billion. However, despite rising speculation that GM may further restructure its relationship with Hughes, the automaker said last month that it has no plans to spin off or divest the Hughes unit, which trades as a tracking stock to GM. A tracking stock mirrors the performance of individual segments of a company's business.
    Speculation has been rampant in recent weeks that Murdoch and company have been on the prowl for a deal. Most recently, reports have emerged that Murdoch has been in talks with Jerry Yang, a co-founder of the Internet powerhouse Yahoo! Inc. Back to top

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.