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Hughes sale not set
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September 17, 2001: 4:18 p.m. ET
GM says in talks with EchoStar for a year; Hughes shares drop 13%
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NEW YORK (CNNfn) - Shares of Hughes Electronics Corp. dropped 13 percent Monday as General Motors had yet to signal an end to its long drawn-out negotiations to sell Hughes to either EchoStar Communications or News Corp.
Discussion with both EchoStar and News Corp. are serious but a timeline to complete the Hughes auction is not set, GM spokeswoman Toni Simonetti told CNNfn.com.
General Motors has been in on again, off again negotiations with EchoStar for about a year, Simonetti said. GM had long been open to a deal with Littleton, Colo.-based EchoStar (DISH: down $2.59 to $22.14, Research, Estimates) when that company apparently walked away earlier this year and then returned in August with a $30.4 billion "bear hug" for Hughes.
In late August, EchoStar revised its offer and began offering alternatives which now include cash, press reports said. In contrast to GM's view of the negotiations, talks with General Motors were primarily "off" during the year-long period, a source familiar with the situation said.
Up until EchoStar's offer, News Corp. had been the frontrunner for the Hughes unit. GM confirmed last May that it had approved talks with Rupert Murdoch's News Corp.
Both companies are now seeking to buy Hughes and gain control of DirecTV, which has more than10 million subscribers. News Corp. hopes to combine DirecTV with its own Sky Global Networks, the world's largest satellite television company.
A combined EchoStar-Hughes would have about 16 million subscribers, close to the number held by AT&T Corp.'s cable unit, AT&T Broadband.
Hughes (GMH: down $2.08 to $14.10, Research, Estimates) stock dropped nearly 13 percent Monday in late afternoon trading. General Motors (GM: down $6.98 to $44.60, Research, Estimates) shares shed nearly 13 percent Monday in late afternoon trading, News Corp (NWS: down $4.35 to $26.40, Research, Estimates) dropped more than 12 percent and EchoStar fell more than 9 percent.
Last week's attack on the World Trade Center has reportedly caused another blip in negotiations for Hughes. GM had hoped to decide on a suitor within a month but now discussions could take longer, the New York Times reported Monday.
GM had wanted to complete the negotiations by September so that Standard & Poor's would not drop GM's credit rating, the source said. In February, S&P revised its outlook on GM to negative from stable.
"Talks with EchoStar and News Corp. are still ongoing," Simonetti said, declining to comment on whether a suitor would be named soon. "We have not come out with any sort of timetable because we don't know," she said.
Hughes (GMH: down $2.08 to $14.10, Research, Estimates) tumbling shares have also taken their toll on negotiations under concerns that Hughes was having difficulty obtaining a premium, press reports said. Hughes shares have dropped nearly 60 percent from their 52-week high and shed another 13 percent Monday.
Hughes stock price is an important part of the negotiations. "Suffice it to say that the price of the stock is an important part of the equation," Simonetti said, who declined to comment further.
Both EchoStar and News Corp. declined to comment. 
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