News Corp raises $1.3bn for possible bid for DirecTV
NEW York – News Corporation could be gearing up for its second crack at acquiring US satellite broadcaster DirecTV, whose merger with EchoStar looks set to founder, as Rupert Murdoch raises around $1.3bn (£820m) via a stock offering in Fox Entertainment Group.
Investors are seeing the secondary stock offering in Fox, which is 85% owned by News Corp. Murdoch is chairman and chief executive of both companies.
The planned takeover of the US's biggest satellite TV provider DirecTV by smaller rival EchoStar looks almost certain to be dead in the water as the US Department of Justice and 23 states try to block the deal.
The deal has already been rejected by the Federal Communications Commission, which said that it was not in the public interest. EchoStar had been pinning its hopes on a series of concessions it had offered -- such as selling enough transmission capacity to allow another satellite operator to start up -- to win Justice Department approval.
At the time, the FCC said: "The combination of EchoStar and DirecTV would have us replace a vibrant competitive market with a regulated monopoly."
A merger between EchoStar and Hughes-owned DirecTV, which is ultimately part of General Motors, would have served 18.2m subscribers, more than 95% of the US satellite TV market.
If the Justice Department does block the deal, Murdoch, with the stock offering capital available, will be ready to start new talks with General Motors about merging DirecTV into News Corporation's satellite TV operations, which also include BSkyB.
Murdoch's US ambitions were dashed last year when EchoStar made a $18bn bid for DirecTV, after Murdoch had been negotiating with EchoStar parent Hughes, part of General Motors, for almost a year.
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