DirecTV deal likely, says News

News Corp executive chairman Rupert Murdoch briefed fund managers Thursday on the DirecTV negotiations

By staff and wire reports

SYDNEY, Australia -- Global media group The News Corp Ltd expects the proposed merger of its satellite television assets with DirecTV will go ahead but could take some time, according to fund managers at a Thursday briefing.

News Corp believes a deal with DirecTV, which is owned by GM unit Hughes Electronic Corp, could be reached within the next few months.

But tax and legal implications, along with shareholder and regulatory approvals could take another six to eight months, they said.

News Corp executive chairman Rupert Murdoch joined chief operating officer Peter Chernin and chief financial officer David DeVoe in a video linkup to a Sydney briefing on Thursday for analysts and fund managers organized by ABN Amro.

Satellite broadcaster to link four continents

Murdoch hopes to create a global satellite broadcaster to be known as Sky Global. It would link four continents and bring together U.S. satellite broadcaster DirecTV with News' satellite interests in Europe, Asia and South America, including BSkyB and STAR TV.

News and GM have been talking for months about the proposed merger but have had significant differences over stakes. DirecTV's U.S. rival Echostar Communications has also been touted as a potential bidder for a deal.

The Australian newspaper reported Thursday morning that ABN Amro estimated News Corp would hold 27 percent of a merged business, compared with the 35 percent it originally expected.

Signs of advertising turnaround

At Thursday's briefing News Corp executives said there were tentative signs the U.S. television advertising market was firming, although the British market remained soft.

"Basically the core businesses are doing well, they're happy with the upfronts for both their own position and industry in general," said a Sydney fund manager.

Another fund manager said prices for News Corp's Fox Entertainment Group Inc. were fairly flat and volumes up on last year.

Shares in News Corp closed 4 cents higher at A$17.53 Thursday. Earlier in New York, its ADRs closed 55 cents lower at US$36.60.

Reuters contributed to this report.