News

Hughes Spins Possible Spinoff

3/29/2001 11:27 AM Eastern

Hughes Electronics Corp. chairman Michael Smith told analysts at a meeting
Thursday that parent company General Motors Corp. has asked him to explore
options for a leveraged deal to spin off Hughes from GM.

Smith denied media speculation that he was holding up merger talks with News
Corp. for personal reasons relating to long-term job security, calling the
premise 'absolutely false and untrue -- it is absurd.'

While he admitted that he was not necessarily comfortable with the level of
debt a spinoff would require, he was convinced such a deal could be put
together.

Analysts are looking at the possibility that Hughes could construct a deal to
merge its DirecTV Inc. direct-broadcast satellite unit with competing DBS
service EchoStar Communications Corp., although some are concerned that such a
deal would not pass government scrutiny.

Late Thursday afternoon, GM issued a statement saying that it is
investigating restructuring alternatives that would boost share prices of GM and
Hughes stock.

'We are open to considering strategic investments in Hughes from a broad
range of interested parties,' GM president and CEO Rick Wagoner said in the
press release, adding that whether and when the companies could announce a deal
remains uncertain.

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