It should have been the defining moment of Rupert Murdoch's long career as a media mogul. But on Saturday evening his 18-month bid to buy DirectTV in the United States to integrate into his global media empire faltered and may now come to nothing.
Mr Murdoch's News Corp said on Saturday it was withdrawing its proposal to take over the satellite TV firm of Hughes Electronics, after Hughes parent, General Motors Corp, failed to choose a buyer at its board meeting earlier in the day in New York.
This leaves EchoStar Communications Corporation, which was believed to be offering as much as $31.5 billion (€35.3 billion) in stock and cash, as the only remaining party negotiating with GM and Hughes. EchoStar is reported to be still interested in completing a deal. Analysts said that until EchoStar had signed a contract News Corp could not be completely discounted. But Mr Murdoch, who had proposed to combine DirectTV with Sky Global networks, a holding company that includes British Sky Television and Star Television in Asia, said: "We have no option but to withdraw immediately our fully negotiated and financed proposal."
He added: "Hughes 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."
The Colorado-based EchoStar is offering 0.75 cents a share for each Hughes share, and is believed to be lining up as much as $5.5 billion in cash from credit lines supplied by UBS Warburg and Deutsche Bank. News Corp had sought Hughes' DirecTV satellite service as the American component of its Sky Global network of satellite TV service, which includes US cable channel Fox News, Fox Broadcasting Network and Twentieth Century Fox film studios. News Corp planned to merge Hughes with Sky Global as an independent publicly traded entity.
GM, which owns roughly 30 per cent of Hughes, could have received about $4 billion in cash from News Corp's partners Microsoft Corp and cable magnate John Malone.
If EchoStar acquires Hughes, it would combine the top two US satellite TV firms, bringing together DirectTV's 10 million subscribers with EchoStar's six million subscribers to its Dish Network.
This could cause antitrust problems in Washington as it would limit choices for rural customers that don't have access to cable television. "This means there will be no choice for millions of TV consumers in rural America," Mr Murdoch said on Saturday.
