DirecTV in the News

Talks Between News Corp and DirecTV Continue

SYDNEY, Sept 7 (Reuters) - Negotiations by Rupert Murdoch's News Corp Ltd to gain control of Hughes Electronics Corp and its DirecTV network were unresolved and remained tricky, the media giant said on Friday.

"Shortly after the end of the fiscal year, we entered formal negotiations with General Motors and its subsidiary, Hughes Electronics, to merge Sky Global with Hughes," chief executive Murdoch said in the group's annual report.

"At the time of writing, these negotiations remain difficult and inconclusive," he said.

News Corp, which has been embroiled for months in talks with General Motors Corp to gain control of Hughes, now faces a rival US$30 billion unsolicited bid by Charlie Ergen's EchoStar Communications Corp.

Murdoch has remained tight lipped on his Hughes offer, but Microsoft Corp is believed to be contributing US$3 billion to US$4 billion while cable pioneer John Malone is believed to be considering a US$500 million to US$1 billion investment.

Shares in News Corp, which holds close to a 10 percent local market weighting, sank 60 cents or almost four percent to A$15.04 in early afternoon trade, following a 2.2 percent drop in its New York-traded ADRs.

News Corp shares are now trading around five month lows as the gloomy outlook for the U.S. economy dampens hopes for a pick- up in advertising revenues in the near future.