Execs at Rupert Murdoch’s News Corp. are ready to make an offer for General Motors’ stake in Hughes if EchoStar’s bid for DirecTV is officially rejected.
Murdoch’s hopes of getting a second shot at buying up satcaster DirecTV grew brighter this week when Washington strongly hinted that the EchoStar/DirecTV merger won’t be cleared because of antitrust concerns.
“We don’t think it’s going to be approved, but we also don’t know what GM wants to do or what other parties might be out there,” said a News Corp. source.
News Corp. would prefer to simply buy GM’s 30% stake in DirecTV parent Hughes rather than orchestrate a complex merger deal. Analysts say such a straight stock deal — worth roughly $5 billion based on current market values — would be considerably cheaper than what EchoStar would ultimately pay.
Last year, EchoStar’s Charlie Ergen beat out Murdoch in the race to buy up DirecTV. Now, Ergen seems to be losing out, with antitrust attorneys at the Justice Dept. apparently advising that the deal be scuttled.
Meanwhile, Hughes CEO Jack Shaw flatly denied reports that the company was considering a management buyout plan if the EchoStar deal fails.