News Corp. Gets DirecTV

[Gregg Lengling]

News Corp. Chairman Rupert Murdoch finally got his wish - a
piece of satellite TV powerhouse DirecTV.

The media giant and executives with DirecTV and Hughes
announced the $6.6 billion transaction for the coveted
satellite assets late Wednesday, capping months of
speculation. Murdoch, who was outbid for DirecTV and Hughes
by EchoStar last year, said during a conference call, "For
those of you waiting on hold (for the call to start), try it
for three years."

The EchoStar bid collapsed in December due to regulatory
resistance. Murdoch said he would celebrate the acquisition
"when we get through Washington." Still, executives were
confident they will win approval for the deal from the Justice
Department and Federal Communications Commission by the end of
the year.

Under the proposed transaction, General Motors, which controls
Hughes, intends to split off the company, and simultaneously
sell its 19.9 percent economic interest in Hughes to News Corp.
for $14 a share, or approximately $3.8 billion. GM would
receive about $3.1 billion in cash, and the remainder would be
paid in News Corp. preferred American Depositary Receipts
(ADRs).

The value of News Corp.'s proposed acquisition of a 34 percent
equity interest in Hughes would be about $6.6 billion. The
total market value of the Hughes split-off transactions -
including shares presently held by GM - is about $17.1 billion,
based on Wednesday's closing price, GM said in a statement.

Current holders of GM Class H common stock would first
exchange their shares for Hughes common stock on a
one-for-one basis, followed immediately by an exchange of 17.5
percent of the Hughes stock they receive for approximately $14
per share in cash and/or News Corp. stock. GM would receive a
distribution of $275 million in consideration of the value
enhancement for Class H shareholders arising from the
conversion from a tracking stock to an asset-based stock.

The Hughes stake will be held By Fox Entertainment Group, the
80.6 percent-owned News Corp. subsidiary.

During the conference call, Murdoch stressed that even with
Fox and News Corp. controlling the nation's largest satellite
TV provider, the companies won't keep programming away from
cable and the "other" satellite TV provider. "We are not going
to keep anything exclusive in any way," he said.

News Corp. and Fox also plan to keep two other Hughes units,
Hughes Network Systems and PanAmSat.