DirecTV to Buy Back Portion of GM Pension Fund Stake

Feb 27, 2006  •  Post A Comment

DirecTV Group said Monday that it has agreed to purchase up to 100 million shares, worth $1.6 billion, of its common stock from General Motors’ employee benefit plans.

The purchase is part of a stock buyback program that DirecTV launched this month. The company expects this round of stock buying to be completed by March 3.

In the GM deal, DirecTV agreed to pay $15.50 a share in cash to purchase the shares. The price paid is slightly less than the $15.75 per-share price at which DirecTV shares were trading Monday afternoon.

Following the sale, GM’s pension funds will own 115 million shares of DirecTV stock, which represents less than 10 percent of the total shares outstanding.

DirecTV has long been interested in buying back some of the shares owned by GM’s pension funds, but was prevented from doing so for two years because GM would have faced a huge tax bill if it sold off portions of its stake in DirecTV. That threat disappeared in December.