News Corp. Prepares for Sky Global Stock Offering

Rupert Murdoch’s News Corp. is dusting off plans for an initial public stock offering of its satellite TV arm, Sky Global Networks, as talks to buy top U.S. satellite TV group DirecTV near a conclusion, an industry source said Thursday.

The source said, however, that it was uncertain whether the delayed public offering would scrape through in the first quarter as Murdoch had hoped, and the exact timing will depend on when the DirecTV talks are wrapped up and when market conditions improve.

“The IPO will not be on the same time scale as before but News Corp. is gearing back up for a flotation, moving in parallel with the DirecTV talks,” the source told Reuters.

Murdoch has been in talks with General Motors Corp.’s Hughes Electronics Corp. over its digital broadcast unit DirecTV for some weeks. The Australian-born media tycoon is keen to add DirecTV, the biggest U.S. satellite broadcaster, to his satellite fold ahead of Sky Global’s flotation.

A Sky Global offering would be the biggest listing in media history, wrapping together News Corp.’s stakes in British Sky Broadcasting, Asia’s Star TV and interests in Italy’s Stream and program listings company TV Guide.

Sky Global, which is expected to be listed in New York, was being valued by analysts as between $35 billion and $40 billion last year, but its worth would change dramatically if DirecTV were included among its list of assets.

“We’ve said we’re working toward [an offering] in the first part of this year and that remains the case,” a News Corp. spokesman said.

While Murdoch has always been at pains to insist the offering had not been delayed, sources say it was put on hold as stock prices tumbled last year and Murdoch pushed on with negotiations over potential Sky Global partners and DirecTV.

Originally planned for late last year, Murdoch said in November that he hoped the public offering would take place in the first quarter of 2001.

Murdoch has been busy drawing strategic partners into the satellite venture, and has already done a deal with U.S. cable TV tycoon John Malone, whose Liberty Media Group has agreed to take a 4.76% stake in Sky Global.

Microsoft Corp. also is widely expected to invest in Murdoch’s satellite TV platform, the industry source said.