Murdoch discusses takeover of <BR>troubled Kirch

LONDON - Rupert Murdoch is to meet with News Corporation executives to discuss the possibility of taking over Kirch TV or force the struggling German media group to buy back BSkyB's stake in pay-TV operation Premiere for £1bn and forcing it into collapse, as relations between the two sour.

The board meeting follows the resignation yesterday from BSkyB's board of Kirch vice-chairman and managing director Dieter Hahn.



Although no reason for the resignation was given in a statement from BSkyB, it is believed that Hahn -- who is expected to succeed chairman Leo Kirch at the helm of the company when he retires -- is trying to avoid a potential conflict of interest between the two companies.



Hahn joined the BSkyB board when News Corp bought its stake in Premiere in December 1999. According to a spokesman for Kirch, Hahn resigned to avoid any conflict of interest during the negotiations with BSkyB.



The companies are currently locked in a battle over the future of their German pay-TV operation Premiere, in which News Corp-owned BSkyB holds a 22% stake.



Premiere has been making heavy losses, which have impacted on BSkyB's results and Rupert Murdoch, chairman of BSkyB parent News Corp, is believed to be keen to sell the stake back to Kirch.



Kirch is contractually obliged to buy back the stake for £1bn, but Kirch -- which is struggling under the weight of big bank debts -- can not afford this sum.



Kirch has potential debts of £1.5bn, including £1bn to Murdoch if he demands Kirch buy back his 22% Premiere stake.



Kirch, however, is putting up strong resistance to a News Corp takeover and yesterday morning it was reported that the German government had advised Kirch to sell its stake in Formula 1 racing to finance the debt rather than sell out to Murdoch.



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