News Corp. Lining Up DirecTV Cash? - Multichannel

News Corp. Lining Up DirecTV Cash?

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News Corp. went to the funding well Tuesday to the tune of $1.35 billion in a
move many analysts believe is an effort to line up the cash to buy up General
Motors Corp.'s stake in DirecTV Inc.

News Corp. America -- a subsidiary of the media conglomerate controlled by
Rupert Murdoch -- is offering a bond convertible into shares of British
satellite outlet British Sky Broadcasting Group plc that could be worth between
$1.35 billion and $1.5 billion, depending on competitive bids for the bond.

Much of that will go toward paying down an outstanding $715 million
exchangeable security, but analysts are speculating that the remaining $635
million or so could be used for a DirecTV bid.

BSkyB will not be issuing new shares to back the bond, leading some to
believe Murdoch will instead tap into his stake in the British direct-broadcast
satellite provider should he decide to pay down the note. That could drop his
stake closer to 30 percent.

Others, however, predicted that Murdoch will use cash assets should he decide
to go forward with the DirecTV bid.

News Corp. has been a longstanding suitor for DirecTV with an eye toward
entering the U.S. satellite market. But it is not alone -- others interested in
the GM stake include Liberty Media Corp. and Baby Bell SBC Communications
Inc.

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