Doubts Cast Over Sky Global Networks IPO
News Corp chairman Rupert Murdoch has said that the company may not proceed with the planned $40 billion initial public offering of its digital satellite TV conglomerate Sky Global Networks unless talks with US satellite broadcasters are successful.
The much-heralded New York listing was originally scheduled for the end of last year, but was pushed back to the first quarter as News Corp entered into negotiations for the acquisition of three US satellite TV companies, including Hughes Electronics’ US satellite broadcaster DirecTV. The cause of delay has been blamed, according to some suggestions, on volatile market conditions and prolonged negotiations with potential strategic investors Vivendi Universal and Microsoft.
Murdoch has been keen to gain a foothold in the US market for many years, and DirecTV, or its parent, Hughes, have long been touted as a natural target for the global media conglomerate.
Turbulent market conditions and the global downturn in advertising revenues have hit News Corp since the beginning of the year, leading the company to more closely examine its bottom-line figures, said CNBC Asia. This, in turn has led to speculation that News Corp may not want to commit the revenues for such an acquisition, especially as rumours circulated that it was exploring the possibility of partnership with rather then an outright takeover of Hughes.
Murdoch said that talks with other US satellite broadcasters are continuing, and must be concluded before a decision on the IPO is made. However he said that the option exists to merge existing [unnamed] public companies, instead of the floatation, which would have been the largest in media history.
A News Corp spokeswoman commented, “If market conditions are right we will go ahead with an IPO [of Sky Global Networks] and as far as I’m aware there’s no change to that position.”