MURDOCH GETS DIRECTV NEWS CORP. GAINS CONTROL OF SATELLITE TELEVISION FIRM.Byline: Evan Pondel Staff Writer News Corp. said Wednesday that it will spend about $6.6 billion to acquire control of DirecTV, giving media mogul Mogul: see Mughal. Rupert Murdoch his long-sought entry into the U.S. satellite television market. The deal for 34 percent of DirecTV parent Hughes Electronic Corp. gives News Corp. access to 11 million subscribers, something Murdoch has been trying to snare snare (snar) a wire loop for removing polyps and tumors by encircling them at the base and closing the loop. snare n. for three years. Terms call for Sydney, Australia-based News Corp. to buy General Motors Corp.'s 19.9 percent stake in Hughes for $3.8 billion. The company will also offer to purchase 14.1 percent of Hughes owned by the public. News Corp. is paying about $14 a share, a 22 percent premium over Hughes' closing price Wednesday of $11.48 on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. . News Corp.'s ownership of Hughes will be transferred to its 80.6 percent- controlled Fox Entertainment Group in exchange for a $4.5 billion promissory note promissory note, unconditional written promise to pay a certain sum of money at a definite time to bearer or to a specified person on his order. Promissory notes are generally used as evidence of debt. and about 74.2 million shares in Fox at $27.99 per share. ``The benefits of this deal will be felt almost immediately,'' Murdoch said in a statement. ``With Fox taking a significant interest in Hughes, we are forging what we believe will be the premier diversified diversified (di·verˑ·s entertainment company in America today.'' David Healy, analyst with Burnham Securities in Arizona, said if anyone benefits from News Corp.'s acquisition, it's General Motors. ``They (GM) have been trying to monetize Monetize 1. To convert into money. 2. To convert from securities into currency that can be used to purchase goods and services. Notes: For example, you'll often hear Internet marketers talk about "monetizing website visitors. their investment in Hughes for a long time,'' Healy said. ``And now they've finally been able to do that.'' Hughes' DirecTV has been a highly sought-after property for several years. Murdoch attempted to purchase the company in 2001 for about $25 billion but was pushed out when EchoStar Communications Corp. dangled a $30 billion deal. The move was snuffed by regulators nearly a year later. Analysts said Murdoch's offer has evolved, and he is now purchasing a stake just large enough to gain control of Hughes. ``Aside from acquiring the stake, Murdoch also seems to be the only game in town that would pursue Hughes at this time,'' Healy said. The current dearth in bids could stem from DirecTV's lack of revenues. ``So, yes, I'd say General Motors is basically getting almost $7 million for a property that has done virtually nothing for the company.'' GM and Hughes have tried to lure other suitors in the past, such as SBC (1) (SBC Communications Inc., San Antonio, TX, www.sbc.com) A large, national telecommunications company that grew from a multitude of local and regional companies, including Southwestern Bell, Pacific Bell and Nevada Bell, into a single, unified brand by 2002. Communications Inc. But News Corp. has always been the most credible bidder, Healy said. Jack Shaw, Hughes' president and chief executive officer, said Hughes would be in a much stronger position to achieve profitable growth under News Corp.'s management. ``And the transaction is also win-win situation ... for the residential and commercial customers of Hughes,'' Shaw said in a statement. After completion of the acquisition, Murdoch will become chairman of Hughes, while News Corp.'s former co-chief operating officer, Chase Carey Chase Carey has served as a Director and as the President and Chief Executive Officer of DirecTV since December 22, 2003. Career History Chase Carey was a Harvard MBA and a college rugby player. , will be named president and chief executive officer of Hughes. The acquisition's closing is contingent on Adj. 1. contingent on - determined by conditions or circumstances that follow; "arms sales contingent on the approval of congress" contingent upon, dependant on, dependant upon, dependent on, dependent upon, depending on, contingent regulatory approvals and GM stockholder approval. In addition to DirecTV, Hughes has an 81 percent equity holding in satellite operator PanAmStat, and owns Hughes Network Systems Hughes Network Systems, LLC (HNS), is a provider of broadband satellite network products for businesses and consumers. HNS pioneered the development of high-speed satellite Internet access services and IP-based networks with its original DirecPC service but which it now markets , a provider of broadband and satellite Network Services. CAPTION(S): photo Photo: (color) MURDOCH |
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