News Corp has formally pulled out of the race to buy US satellite pay-TV giant DirecTV, leaving Echostar Communications as the only other likely bidder. "We have no option but to withdraw immediately our fully negotiated and financed proposal,'' said chief executive Rupert Murdoch in a statement.
"Hughes [DirecTV's immediate parent company] would have been an excellent strategic fit for our global platforms, and we are disappointed with the board's inaction in the face of an as-yet unfinanced counter proposal.'' Murdoch said. Echostar, which operates the DISH network, is believed to be offering $31.5bn for the service in a mixture of shares and $5.5bn cash. But analysts still speculate that its bid could run into anti-trust problems with US regulators. If that were the case News Corp may be able to re-bid for DirecTV.
But another option is simply for General Motors, Hughes parent company, to terminate the sale process. News Corp, which had been bidding in partnership with Microsoft and Liberty Media, had seen DirecTV as a key component in Sky Global Network, a satellite TV holding company that would have had operations in Europe, North and South America and Asia. It would also have complemented its Fox channels in the US and 20th Century Fox studio. The new company would have been floated on the stockmarket, but worsening economic conditions and the events of Sept 11 dented both the prospects of a flotation and the value of News' bid.