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GM Mulling Hughes’ Fate

Detroit – General Motors said it is exploring a wide range of options on what to do with its Hughes Electronics unit, and should reach a decision within a matter of months.

GM said it has no current plans to sell or spin off the wholly owned subsidiary, whose DirecTV satellite TV business, the nation’s largest, boasts some 8 million U.S. subscribers and is expected to bring in about $5 billion in revenues this year. But the automaker acknowledged that it is in talks with a number of companies, and is considering three types of strategic partnerships for Hughes: a direct broadcast partner, a content provider partner or an Internet partner. Another option, the company said, is to simply retain the current structure.

DirecTV declined TWICE’s request for comment.

GM is searching for a new Hughes strategy in an effort to bolster the stocks of both companies, which GM believes are undervalued. GM holds a 33 percent interest in Hughes, which is a tracking stock.

Wall Street watchers suggest that some of the impetus for GM to sell off its Hughes shares is coming from veteran corporate raider Carl Icahn, who has reportedly been pressing the issue with management. Observers say federal regulators may force AOL to divest its own 5 percent interest in Hughes before greenlighting a TimeWarner deal, which, combined with GM’s stake, would make Hughes a tempting takeover target for media giants News Corp. and Disney.

GM’s stock was up 2 7/16 and Hughes shares rose 3/16 yesterday amid the speculation.