DirecTV Retires Part of GM Stake

The GM pension fund sells almost half its holdings back to the satellite broadcaster.
Author:
Publish date:

Rupert Murdoch-controlled

DirecTV

(DTV)

will buy back 100 million common shares from the pension plans run by former parent

GM

(GM) - Get Report

.

The move will cut the GM pension plans' stake in satellite TV broadcaster DirecTV roughly in half. GM sold its stake in DirecTV to Murdoch's

News Corp.

(NWS) - Get Report

in December 2003.

DirecTV said Monday that it will pay $15.50 a share in cash, a 1% discount to Friday's closing price. The stake amounts to 7% of DirecTV shares outstanding. After the transaction closes on March 3, the GM Employee Benefit Plans will hold 115 million DirecTV shares.

The news comes just weeks after DirecTV unveiled a $3 billion buyback plan, as shareholders keep an eye on the company's strategic direction. Late last month,

TheStreet.com

reported that DirecTV and rival

EchoStar

(DISH) - Get Report

were

joining up to launch a nationwide wireless broadband network.

"We view this announcement as a slight positive as it may lessen some overhang on the DTV shares," writes Prudential's Kathy Styponias, who rates DirecTV underweight and has a $17 price target. "However, we believe investors have already priced in $3 billion of buybacks, and GM's shares do not represent incremental repurchases of equity."

On Monday shares in DirecTV were trading up 11 cents to $15.79.