|
GM approves DirectTV talks
|
 |
May 1, 2001: 6:17 p.m. ET
News Corp. to get 30% of combined firm, deal in 1-2 months, source says
|
NEW YORK (CNNfn) - General Motors Corp. confirmed Tuesday that it has approved further discussions with Rupert Murdoch's News Corp. Ltd. on a deal that would combine satellite subsidiaries Hughes Electronics Corp. and Sky Global Networks.
Boards for both GM and Hughes have approved further negotiations. However, GM and Hughes reiterated that there can be no assurance that the parties will reach an agreement. If an agreement is reached, there can also be no guarantee that any conditions would be satisfied or that a transaction will be reached.
Any merger of Hughes (GMH: up $0.75 to $22.00, Research, Estimates) and Sky Global would be subject to a number of conditions including approval from the boards of GM, Hughes, News Corp. and Sky Global.
"We are delighted with this development," a News Corp. spokesman said. "We can now move forward to a definitive agreement with GM and Hughes."
The announcement brings Rupert Murdoch one step closer to creating a $70 billion satellite company, which has long been rumored. GM (GM: up $0.31 to $55.12, Research, Estimates), the world's largest automaker, owns 100 percent of the assets of Hughes and 30 percent of the tracking stock.
El Segundo, Calif.-based Hughes, in turn, owns DirectTV, the No.1 satellite-television broadcaster. Sky Global Networks, a unit of News Corp., is the world's largest satellite television company.
If consummated, Rupert Murdoch will gain control of DirectTV, which has nearly 10 million subscribers in the U.S, as well as management control.
Sydney, Australia-based News Corp. (NWS: up $0.35 to $38.75, Research, Estimates) which also own the Fox Broadcasting Co., will get 30 percent of the combined Hughes-Sky Global-DirectTV entity while GM will end up with a 70 percent stake, a person familiar with the situation told CNNfn.com. The deal will take at least a month to work out but most of the details have been hammered out over the past eight months of negotiations, the source said.
Murdoch personally pitched the combination to GM's board last week. However, terms of the negotiations are not known.
"No one knows what the details are," a source familiar with transaction told CNNfn.com. "No one does. They are still working on them." 
|
|
|
|
|
 |
|
