News Corp lines up joint bid for DirecTV

[Gregg Lengling]

Owen Gibson
Wednesday December 18, 2002

 
John Malone
 
Rival media moguls Rupert Murdoch and John Malone are considering joining forces to bid for US satellite TV giant DirecTV.

Top executives from Murdoch's News Corporation were due to meet DirecTV's owner General Motors for the first time today to discuss a possible deal, according to reports in the US.

Murdoch had been expected to make a renewed bid for DirecTV ever since US regulators blocked a £12bn takeover bid from Charlie Ergen's Echostar over monopoly fears.

But suggestions from US sources that he plans to take an equal stake with Malone's Liberty Media have come as a surprise to analysts.

The meeting, due to take place in New York later today, is expected to cover the preliminary details of any possible deal.

Having long coveted DirecTV as the missing link in his global satellite broadcasting empire, which also spans Sky in the UK and Star TV in Asia, Murdoch had been expected to go it alone in his bid for the company.

News Corp's last, failed bid for the company,  
 
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was also in conjunction with Liberty.

Liberty's John Malone, who holds stakes in several pay TV businesses around the world, is keen to increase the number of businesses in which he has a significant stake.

This, say analysts, is likely to be the motivation behind his joint venture bid for DirecTV and his key position in the restructuring of cable companies Telewest and NTL in the UK.

The Washington Post today quoted sources close to the Denver mogul saying Malone was insisting on being more than the silent partner he was in the previous deal, when Liberty pledged £313m in cash towards News Corp's failed bid for Hughes.

Under plans for the joint venture, with both companies sharing equal board control, Liberty and News Corp each would put up half of the estimated £3.1bn it would cost for the 30% controlling stake in Hughes owned by GM