QBID seeing movment...wonder it this is why..QBID's programing is supposed to go live soon in DishNetwork.
NEW YORK, May 24 (Reuters) - Satellite television provider EchoStar Communications Corp. <DISH.O> said on Thursday it could enter into talks to combine with larger rival DirecTV, a move that would compete with a proposal by Rupert Murdoch's News Corp. <NWS.N><NCP.AX> for the unit of General Motors Corp.'s <GMH.N> Hughes Electronics Corp. <GMH.N>.
Littleton, Colorado-based EchoStar said in a filing made on Thursday with the U.S. Securities & Exchange Commission, "GM notified EchoStar this week that GM was willing to establish a dialogue between EchoStar and GM's respective legal and financial advisors so as to better understand a possible transaction."
News Corp. <NWS.N><NCP.AX> is in formal talks with GM and Hughes to merge DirecTV, the largest U.S. satellite television company, with nearly 10 million subscribers, into its Sky Global network of satellite services in Europe, Asia and Latin America.
EchoStar shares fell 3 percent, or $1.03, to $33, in afternoon Nasdaq trading, while Hughes shares, which trade as GM tracking stock, rose 3.4 percent, or 80 cents, to $24.55, on the New York Stock Exchange.
ECHOSTAR REBUFFED LAST YEAR
EchoStar, the No. 2 U.S. satellite TV provider, with nearly 5 million subscribers, disclosed its interest in a combination with DirecTV in an SEC filing last November, but said GM was unwilling to talk.
Willingness to talk, however, does not necessarily mean discussions are imminent.
"There can be no assurance that any substantive discussions will occur between the parties or that any agreement between the parties will result," EchoStar said in Thursday's filing.
Earlier this month, GM's board of directors agreed to enter into formal talks with News Corp. to merge Hughes with Sky Global, a move that would give Sky Global a critical U.S. component and a global distribution platform for entertainment and interactive television services.
GM, NEWS CORP TALKS CONTINUING
"These negotiations are progressing and they are our priority," said GM spokeswoman Toni Simonetti. "Generally speaking, we have an obligation to evaluate any alternative that is presented in the interest of our shareholders."
She declined to comment on any talks with EchoStar.
News Corp. spokesman Andrew Butcher said, "Everything is progressing nicely but slowly."
American depositary receipts of News Corp. fell 2.4 percent, or 91 cents, to $36.32 on the Big Board.
Microsoft Corp. <MSFT.O> is believed to be contributing $3 billion in cash to the News Corp. deal in exchange for a minority stake and a potential customer for its digital set-top box software. Cable magnate John Malone is also believed to be a partner with News Corp. in the deal.
The Wall Street Journal reported in its Thursday edition that EchoStar plans to offer $5 billion in cash quickly. GM would then spin off Hughes, which would then merge with EchoStar.
EchoStar has $1.3 billion in cash and marketable securities on its balance sheet and plans to price another $1 billion of convertible notes on Thursday.
REGULATORY ISSUES EYED
A DirecTV-EchoStar deal would combine the two largest U.S. satellite television services, which some analysts say could create regulatory issues because it would limit competition in rural areas. Most rural areas do not have access to digital cable, a main competitor for satellite television services.
News Corp. President Peter Chernin fanned such flames earlier this month when he said he expected no regulatory issues with his company's proposal and that the same could not be said for any alliance between DirecTV and EchoStar .
EchoStar Chief Executive Charlie Ergen has acknowledged in the past that a EchoStar-Hughes deal could encounter some questions from U.S. regulators, but said it could eventually gain approval.
Proponents of an EchoStar-Hughes merger argue it would yield more cost savings than a deal with News Corp., because Hughes and EchoStar operate the similar service in the same country. They also argue that Hughes would be merging with an existing entity with a transparent market value.
News Corp. has proposed spinning off Sky Global as a publicly traded entity after merging with Hughes, creating some uncertainty among Hughes stockholders of the value of the combined entity's shares.
On the other hand, News Corp. proponents say there are significant cost savings to be realized in the Latin American properties of Sky Global and DirecTV. They add that EchoStar and Hughes have incompatible set-top box technology, which would be costly to integrate. |
