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Friday, 7 December, 2001, 15:55 GMT
Murdoch 'mulls Kirch takeover'
Michael Schumacher drives Formula 1 Ferrari
Kirch's empire includes Formula 1 broadcasts
Media magnate Rupert Murdoch is believed to be pondering a takeover of Kirch Gruppe, the German media rights firm giant that owns the pay TV rights to the next two World Cup football tournaments.

Buying Kirch - Germany's biggest commercial TV broadcaster - would make Mr Murdoch the most powerful broadcaster in Europe, analysts say.

Mr Murdoch is believed to have discussed the possibility of a full takeover of Kirch with his advisors, the Financial Times reported on Friday.

Such a deal is fraught with difficulties, the paper acknowledged, and would take "many months" to complete.

Got the hots

It quoted a person who knows Mr Murdoch well as saying "Rupert has really got the hots for the whole of Kirch right now." It did not name the person.

Kirch has dismissed the story as "pure speculation without any basis in fact".

Dr Leo Kirch
Leo Kirch: mould breaker
News Corp, the company run by Mr Murdoch, was not available for comment

Mr Murdoch has an option to require Leo Kirch, the 73 year-old mogul who built the business, to buy him out of a 22% stake in Kirch's pay-TV business known as Premiere, the newspaper reported.

Any takeover strategy is likely to hinge on this option.

Past failures

If Mr Murdoch decides to exercise the option Kirch would have to pay about 1.8bn (2bn euro) in cash.

Executives at News Corp calculate that Kirch, which is saddled with about 4.4bn euros in debt, would struggle to pay, the Financial Times said.

Kirch's debts are thought to make it less attractive to News Corp, but could equally act as the lever to enable Mr Murdoch to use the Premiere option to push open the door to takeover talks.

In October, Mr Murdoch lost out to Echostar in his year-long campaign to acquire DirecTV, the biggest satellite broadcaster in the United States from the General Motors unit Hughes Electronics.

Mr Murdoch withdrew his bid after General Motors' board failed to decide between the two competing bids.

One Sydney-based fund manager, who did not wish to be named, viewed it as "highly likely" the energetic 70-year-old tycoon - who became a father for the fifth time last month - would be seeking new acquisitions after his failure to clinch DirecTV.

See also:

07 Sep 01 | Business
Kirch creates German media giant
29 Oct 01 | Business
DirecTV sold to Echostar
06 Apr 01 | Business
New force in F1
06 Apr 01 | Business
Ecclestone: F1 to remain on free TV
01 Mar 01 | Business
Formula One battle hots up
27 Feb 01 | Business
Car makers may bid for F1
16 Feb 01 | Business
EM.TV rescue deal wobbles
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