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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: porcupine --''''> who wrote (1044)	12/18/1998 1:34:00 AM
From: porcupine --''''>	Respond to of 1722

Hughes Electronics to buy U.S. Satellite for $1.3 billion NEW YORK, Dec 14 (Reuters) - Hughes Electronics Corp. said Monday it will acquire U.S. Satellite Broadcasting Co. Inc. for $1.3 billion in a move to strengthen its position as the nation's largest direct broadcast satellite television service. The deal, which will enhance Hughes's DIRECTV satellite TV business, had been widely expected following DIRECTV rival EchoStar Communication Corp.'s move last month to buy the satellite television assets of News Corp Ltd. and MCI WorldCom Inc., analysts said. The deal will help DIRECTV reduce costs by consolidating redundant operations and increase its average revenue per subscriber, the company said, but it did not comment in a news release on the number of likely job losses. Hughes Electronics, a unit of General Motors Corp., said the value of the transaction was based on Friday's $38.25 per share closing price of GM's Class H common stock. Shares of U.S. Satellite surged 31 percent, or $2.875, to $12.50 on the Nasdaq market, building on gains seen last week as rumors of a pending deal circulated. Hughes' stock added 62.5 cents to $38.875 on the New York Stock Exchange. "The combination with USSB will not only extend DIRECTV's competitive position, it will improve its financial performance, thereby creating significant value for GM Class H shareholders," said Hughes' Chairman Michael Smith. DIRECTV plans to expand its 185-channel programming lineup to more than 210 channels through the addition of premium multi-channel movie services such as HBO and Showtime. Hughes said it will combine its DIRECTV business, which has more than 4.3 million subscribers, with U.S. Satellite's assets and satellite slots. Hughes also plans to use certain frequencies for DIRECTV's Spanish-language services once it receives Federal Communications Commission approval. Upon completion of the merger, DIRECTV will consolidate billing, customer service, remittance processing and broadcasting centers now maintained by U.S. Satellite, Hughes said. U.S. Satellite shareholders may receive 0.3775 shares of GM class H stock for each share they hold, or the cash equivalent. The exchange ratio is fixed as long as the 20-trading-day weighted average price of the class H stock ending two days before the closing date is within a range of $27.82 to $47.68 per share. The merger is subject to U.S. Satellite shareholder approval and certain regulatory and antitrust clearances. It is expected to close in mid-1999. (( Jessica Hall, New York newsroom 212-859-1729))