http://www.denverpost.com/business/ci_4063441
Shares of Douglas County-based EchoStar Communications Corp. rose to a 17-month high Monday on speculation that rival DirecTV Group Inc. may bid on the company.
Officials at both satellite-TV companies had no comment on the reports Monday. Such a merger would raise significant antitrust hurdles, but analysts said the argument could be made that a combined DirecTV EchoStar could more effectively provide broadband services and compete against cable-TV and telecommunications companies that are offering video and Internet services.
At last week's Allen & Co. summit of media moguls in Sun Valley, Idaho, speculation intensified about Echo Star's future. News Corp. chairman Rupert Murdoch, whose company controls DirecTV, attended the event, as did Charlie Ergen, Echo Star's chairman, chief executive and co-founder.
Any decision to sell the company would rest solely with Ergen, who controls more than 90 percent of the company's voting-share power.
"Charlie has three choices. He can be acquired by DirecTV (or) AT&T or do a leveraged buyout and take the company private," Kaufman Bros. analyst Todd Mitchell said in a recent interview. "If he takes the company private, he still hasn't done anything about his competitive position."
Shares of EchoStar, the nation's second-largest satellite-TV provider, closed up $1.89, or 6.2 percent, at $32.52 on the Nasdaq Stock Market on Monday. Shares climbed as high as $32.80 in early-morning trading.
EchoStar shares last hit $32.52 on Feb. 17, 2005.
Shares of El Segundo, Calif.-based DirecTV closed up 8 cents to $16.49 on the New York Stock Exchange on Monday. The stock has gained 17 percent this year. DirecTV has more than 15 million customers. EchoStar has 12.3 million.
At the Sun Valley conference
last week, News Corp.'s Murdoch "dismissed the idea that (EchoStar's) Ergen would sell," the Los Angeles Times reported Monday. "But others at the conference said the wily Ergen had been telling guests that a merger could save $3 billion in expenses."
In January, analysts raised the possibility of an EchoStar sale to San Antonio, Texas- based AT&T Corp. Ergen shot down that idea, stating that the company wasn't for sale. EchoStar has a marketing partnership with AT&T. DirecTV has a similar agreement with Denver-based Qwest.
In 2002, Ergen attempted a merger with DirecTV, then controlled by Hughes Electronics. That attempt faltered after it failed to pass antitrust review by the Federal Communications Commission. Murdoch's News Corp. eventually acquired control of DirecTV.
"It's too complex, too close on the heels of what went down (four) years ago," said Jimmy Schaeffler, senior multichannel analyst for the Carmel Group.
Satellite-TV providers' dire need for a high-speed Internet and telephone offering is fueling the speculation.
EchoStar is "extremely worried about the broadband play," Schaeffler said
Well Dish again could just get their broadband from SBC or AT&T provide the service to Dish Customer.