News Corp. executives declined Wednesday to confirm published reports earlier
in the day that said the company was closer than ever to signing a deal to buy
DirecTV Inc. from Hughes Electronics Corp. parent General Motors Corp.
Reports in Variety, USA Today and the Los Angeles Times, among
others, said that following a spinoff by GM, News Corp. plans to merge Hughes
into its worldwide satellite operations to create a separate company valued at
$70 billion.
Microsoft Corp. and Liberty Media Group are also expected to participate in
the deal, with Microsoft investing $4 billion and Liberty $1 billion.
In an earnings call with reporters, News Corp. president Peter Chernin said
the company was in no position to comment on speculation in the press, but he
added that the valuation ranges reported for such a combined company were
probably on the low end of what it actually would be.
When asked whether News Corp. plans to retain DirecTV global chairman Eddy
Hartenstein once a deal is signed, Chernin again declined to comment on any
possible deal, but he added that he and News Corp. chairman Rupert Murdoch 'have
a lot of respect and admiration for Eddy.'
News Corp. is expected to gain managing control of the company in the event
of a deal, which some sources admitted could still fall through. If signed, the
deal could be announced within the next week or two.
Hughes spokesman Richard Dore declined to comment on the reports, saying that
the company 'continues to talk to multiple parties.'
Another source close to the companies said it was unlikely that Hughes was
still in talks with other parties about a possible deal.
Share prices for Hughes closed 10.68 percent lower Wednesday, at $24.75 each,
following the reports.
