DrecTV Swap Between News Corp., Liberty Media?
News reports yesterday suggested that News Corp. and Liberty Media are discussing an agreement that would include swapping News Corp.'s 40 percent stake in DirecTV - worth about $9 billion - for Liberty's 18 percent hold on News Corp. (valued currently at $11 billion).
According to Wachovia's Jeff Wlodarczak citing a CNBC report, News Corp. owner Rupert Murdoch is souring on DirecTV and his company is attempting to resolve the 18 percent ownership stake issue by the Oct. 20 shareholder meeting. Press reports have noted that Liberty is also talking to News Corp. regarding its TV stations, the report said.
Wlodarczak said Murdoch seems to vary from week to week on his commitment to being in the satellite television biz as "industry transforming transactions" loom on the horizon for the U.S. DBS market.
Speaking on the recent talks of a merger between DirecTV and EchoStar Wlodoarczak said, "If management reached the conclusion that they could not clear regulatory hurdles or EchoStar CEO (Charlie) Ergen is unwilling to sell, it may - along with the prospect of buying back the 18 percent in News from Liberty - have opened up the possibility of a News Corp. exit from DirecTV.
"If News Corp. decides to swap its stake in DirecTV with Liberty Media it would likely reduce EchoStar's short-term negotiating leverage for a potential sale of the company to AT&T," the analyst said.
Rupert Murdoch is souring on DirecTV
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