Murdoch's DirecTV talks back on

Rupert Murdoch's global satellite ambitions come a step closer

Rupert Murdoch's ambitions to create the first global satellite television network with the purchase of DirecTV in the US is back on track.

General Motors' board of directors agreed on Tuesday to step up talks with Mr Murdoch's News Corp.

The world's biggest car maker is eager to unload its Hughes Electronics subsidiary, of which DirecTV is a major part, to focus on its core vehicle business.

News Corp wants Hughes' DirecTV satellite business because it would fill the US gap in Murdoch's Sky global satellite TV network and add 10m subscribers.

"The focus of our efforts is to try to get a transaction with News Corp," a GM spokeswoman said.

"We continue to look at other alternatives, but it's safe to say that talks with News Corp are the focus of our attentions."

The talks over the $70bn merger pact broke down in March amid a disagreement over valuation after terms of the deal were leaked to the press.

If the merger were finalised, Mr Murdoch would become chairman of the DirecTV-Sky group.

News Corp, which controls Mr Murdoch's global newspaper and terrestrial television interests, would be a shareholder.

On again

The on-again and off-again discussions were restarted after Mr Murdoch - who operates the Star and Sky satellite networks in Asia and Europe respectively - made a personal sales pitch last week to GM executives in Detroit.

The details of the pitch have not been release but it is thought to have included a lower level of ownership of the combined group by News Corp.

Under the terms of the original deal, Sky's assets would be merged into Hughes, with News Corp owning about 35% of the total and shareholders in Hughes 51%.

When details were leaked to the media, Hughes' shareholders complained that GM was undervaluing the company.

GM has pushed to increase Hughes shareholders' stake in the merged company to 70% and any new deal is expected to involve a re-evaluation of Sky's assets rather than more cash.

News Corp could achieve this by taking StarTV and Stream, its two unprofitable and difficult-to-value assets, out of Sky.

StarTV is News Corp's struggling satellite service in Asia, while Stream is a satellite venture in Italy.

Divisions of Hughes, like commercial satellite operator Panamsat, are expected to be sold off after the merger.

Other bidders

Hughes' management, lead by chairman Michael Smith, have opposed the sale to News Corp and expressed interest in a buyout.

Mr Smith said in March that Mr Murdoch's offer undervalued the company.

GM has considered a spin-off of Hughes with the backing of a financial buyer such as GE Capital.

But General Electric, of which GE Capital is a subsidiary, already owns the NBC network in the US and does not want to increase its broadcast interests.

Hughes shares have lost $10bn in value since talks broke down in March.