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Murdoch moves closer to DirecTV deal

By:
May 29, 2001 | 8:58am EDT

The sudden resignation of Hughes Electronics Chairman Michael Smith on Friday was being viewed as a stroke of good fortune for Rupert Murdoch, who is bidding to take over Hughes, operator of the DirecTV satellite service, and a setback for EchoStar Communications' Charlie Ergen, who is trying to do the same. Both men, according to published reports, spent the Memorial Day weekend meeting with advisers to plot future strategy related to their takeover efforts. Smith had publicly opposed Murdoch's bid while reportedly meeting with Ergen to devise a counter scheme. According to Tuesday Wall Street Journal, Smith's maneuvering with Ergen angered officials at General Motors Corp, which controls Hughes, and led to his forced resignation. He was replaced by GM Vice Chairman Harry J. Pearce, who has favored a deal with Murdoch. The WSJ, citing analysts and industry officials, said that Pearce is being viewed as a "caretaker" of Hughes, pending the closing of a deal with Murdoch. However, Pearce told the newspaper that Smith (who was not available to comment) made his own decision to step down and that he -- Pearce -- will study all "serious" offers for the company.

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