News Corp. has finally secured a deal to buy control of DirecTV Inc.
parent Hughes Electronics Corp. in a deal valuing the company at $17.7 billion
-- about one-half of what News Corp. chairman Rupert Murdoch was offering to pay
two years ago.
Murdoch agreed to pay $6.6 billion to acquire 34 percent of
Hughes' stock at a price of $14 per share.
News Corp. will pay $3.8 billion for the 19.6 percent of Hughes owned by its
parent company, General Motors Corp.
All but $700 million of that would be paid in cash, with the remainder in News
Corp. stock.
Those are supervoting shares that yield almost one-half of the shareholder votes.
Murdoch will then offer to buy another 14 percent of the company's stock from
public shareholders, aiming to deflect any criticism that outside holders would
be left out and stuck with Murdoch in control.
That purchase would come through a tender offer of an undisclosed mix of cash
and News Corp. stock.
The deal will draw antitrust scrutiny over
how Murdoch might use his control of DirecTV to favor his networks over
rivals like Cable News Network and, conversely, how he might use his valuable regional sports
networks to favor DirecTV against competing cable operators.
Murdoch declared that he plans to abide by the federal program-access rules that currently apply only to vertically integrated cable operators,
saying that Fox networks will be available to cable operators on the same terms
that they are purchased by DirecTV.
"Agree to be bound by FCC program-access regulations," Murdoch
said.
Murdoch has been courting DirecTV for years, almost snagging it before he was
outbid by rival direct-broadcast satellite service EchoStar Communications Corp.
That deal was torpedoed by antitrust regulators, forcing
GM to go back to Murdoch for a much more modest sale of only part of
Hughes.
