DIRECTV DEAL IN LIMBO AS MURDOCH BEGINS TO EYE ECHOSTAR
News Corp. Chmn. Rupert Murdoch reportedly is eyeing deal with EchoStar or return to Sky Global IPO as talks with Hughes for purchase of DirecTV “drag on,” industry source said Thurs. “He’s starting to get impatient with slow pace” of negotiations, but he “still believes he can pull the deal off. Everybody in industry, including Murdoch, expected the sale to be completed by now.” However, sources close to and outside company believe Murdoch is starting to consider alternatives to purchase of DirecTV, and EchoStar is viable opportunity. In recent days, Murdoch has gone out of his way to praise EchoStar CEO Charles Ergen, his long-time rival, calling him “tremendous businessman. “The talks are starting and stopping and it’s not clear to anyone when the deal might be done,” industry official said.
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Companies reportedly had agreed to provisional deal last month (CD March 1 p7) to merge News Corp. Sky Global satellite unit with Hughes-owned DirecTV that would have created $75 billion empire before talks hit snag, sources said. “Honestly speaking, I heard News Corp. thought they had a deal, but GM and Hughes just wouldn’t take the next step,” said attorney close to Hughes and familiar with negotiations. Some published reports indicated primary opposition was coming from GM CEO Michael Smith, but Hughes and GM wouldn’t confirm any of speculation.
GM also said it still was exploring other opportunities to sell largest DBS company in U.S. “We have been working on this for quite some time and are ready to find an outcome, but it’s just not there yet,” GM spokeswoman said. “There’s a full range of possibilities open to us and we have not ruled anything out. You have to remember that any deal we strike will be a complex one.”