News Corp agreed today to divest satellite broadcaster DirecTV as part of a deal that will see nettlesome rival Liberty Media drop its stake in the media empire controlled by Rupert Murdoch. News Corp, which some analysts saw as threatened by the large stake from Liberty, will get back the 16.3 percent share in exchange for giving Liberty its controlling interest in DirecTV and three regional US sports networks.
News Corp will also pay $550 million in cash to Liberty, a holding company controlled by tycoon John Malone that had been increasing its holdings in the media giant. A News Corp statement said the deal “will unlock tremendous value” for the company built by the Australian-born Murdoch and now incorporated in the United States. Liberty said in a separate statement it was pleased to get the 38.5 percent stake in DirecTV Group.
“We are happy to become the largest shareholder in the world’s largest satellite television provider,” said Liberty president and chief executive Greg Maffei. During 2006 we converted many passive investments into strategic operating businesses, but this transaction is the largest and most important.”
The deal ends more than a year of discussions between the two groups since Liberty Media converted its long-term non-voting share stake in News Corp to voting shares last year. Liberty built up a holding in News Corp which threatened to challenge the Murdoch family’s control of the company. The Murdoch family controls just over 30 percent of News Corp’s voting stock.
(Source: AFP)
