Even after 18 months of negotiating to buy Hughes Electronics, News Corp. executives are still finding multibillion dollar surprises.
No, not the sliding operating performance of coveted DBS unit DirecTV. News Corp. President Peter Chernin has been startled by an old, potential environmental liability dating back to Hughes' manufacturing operations dating back to the 1960s. "They used to put asbestos in satellites," said one industry executive. Part of the delay has come over how to handle the liability, with News Corp. executives trying to stick it back onto Hughes parent General Motors. Hard to do when you're buying an entire company, not just its assets.
Chernin had recently been telling associates that he expected a deal to get nailed down by the end of last week. Now, he's not putting a time frame on it.
- John M. Higgins