Rupert Murdoch’s News Corporation is preparing to make a bid for DirecTV, the largest US satellite operator, according to reports emanating from Wall Street.
The Observer claims that Murdoch is tieing up loose ends ahead of $7 billion offer for the broadcaster that would represent the media mogul’s first foray into the American satellite market.
It is understood that Murdoch would set up a new company to acquire DirecTV, which is currently owned by GM’s Hughes Electronics. However, it would be controlled by News Corporation and the costs would be shared with John Malone’s Liberty Media. The US corporate giant has an 18% share in News Corp and suggested last week that it may put the $1.5 billion it raised in a convertible bond sale towards future acquisitions.
News Corp has raised a similar amount by selling equity-linked bonds but insisted that the money would be set aside for “general corporate purposes” (see News Corp To Raise $1.35 Billion By Remortgaging Sky Stake). Murdoch and Malone recently shelved plans to make a joint-bid for Hughes (see Murdoch & Malone Pull Out Of Joint Bid For Hughes) and could still face competition from the US telephone company SBC, which has already expressed an interest in DirecTV (see SBC Expresses Interest In DirecTV).
