By editorial@silicon.com, 2 May 2001 16:02
NEWS Following a personal pitch from Rupert Murdoch, the General Motors (GM) board agreed to escalate talks with News Corp to sell Hughes, which includes DirecTV, a digital entertainment service in the US and Latin America. News Corp attempted a merger with Hughes earlier this year. The proposal had offered Murdoch's company 35 per cent of a joint organisation with the media magnate becoming chairman of the DirecTV-Sky group. The new company would be worth approximately $70bn. Details of the original deal were leaked and shareholders derailed the bid, complaining that GM was undervaluing Hughes. The new deal, which would give Murdoch key access to the US satellite TV market to add to his international holdings elsewhere, is thought to be made up of a decreased final ownership of 30 per cent of the joint organisation. GM said that it is not excluding other organisations from any possible bids, but that it is clearly keen on the News Corp proposal and will be trying to conclude the sale. Divisions of Hughes, such as PanAmSat, owners of the largest commercial satellite fleet in the world, are expected to be sold after any deals are concluded. GM has been keen to divest itself of some non-core assets to focus more clearly on its vehicle business.
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