Rupert Murdoch is reported to be eyeing up a full takeover of Germany's Kirch group.
According to the Financial Times the two companies have discussed such a move, which would give Murdoch the position in central Europe he has long craved. Kirch denied that discussions are taking place.
Murdoch joins another US giant, John Malone' Liberty Media, in targeting Germany for major expansion. While Kirch's pay-TV operations would fit with News Corp's SkyGlobal satellite TV business, Liberty (which is also a major News Corp shareholder) is currently building up a position as the country's largest cable network operator.
Although the two groups have often been partners, News Corp currently has a gun to Kirch's corporate head. It owns a 22% stake in KirchPayTV, the subsidiary that controls Premier World, and recently let it be known that it intends to use the "put option" that next October would require Kirch to buy back the Euros2bn stake. In its recent financial statement, News Corp's BSkyB operation publicly said that it doubted that the debt-ridden Kirch has the resources to buy back the shares.
Rather than allow the bankruptcy of KirchPayTV which could have dire consequences for the whole of his empire, Kirch is thought more likely to negotiate. One option that has previously been rejected, but might return to the negotiating table is the sale of the 22% stake to Malone's Liberty.