|
EchoStar's Hughes bid hit
|
 |
June 15, 2001: 6:07 a.m. ET
Report: U.S. satellite broadcaster fails to secure backers for Hughes bid
|
LONDON (CNN) - The No. 2 U.S. satellite broadcaster EchoStar has failed to secure backers for a planned bid for Hughes Electronics, a report said on Friday.
The failure by EchoStar to raise $5 billion in short-term financing makes it more likely that Rupert Murdoch will succeed in his efforts to buy Hughes, a unit of General Motors (GM: Research, Estimates), the Financial Times reported.
Charlie Ergen, EchoStar's controlling shareholder, is instead trying to raise the cash to mount a bid alone and believes he could bring in other investors later, the FT said, citing a person close to the company.
The lack of strategic allies will add to the obstacles that stand in the way of an EchoStar's bid for Hughes, which owns satellite broadcaster DirecTV.
By combining the U.S. satellite TV companies, an EchoStar deal would face significant regulatory hurdles, the report said, quoting analysts at Merrill Lynch.
Click here to check on satellite stocks
EchoStar has approached a wide range of companies in recent weeks to try to raise the $5 billion of cash it would need to rival the Murdoch bid.
GM, Hughes' parent, hopes to use the disposal as a way of boosting cash reserves.
Other recent events have added to the prospects that Murdoch will succeed with his offer for Hughes (GMH: Research, Estimates).
This week, DirecTV warned it would attract far fewer new subscribers this quarter than it had estimated - which saw more than 10 per cent wiped off its share price.
That tilted the deal in favour of Murdoch's News Corp. (NWS: Research, Estimates), since it raised the relative value of the global satellite assets that he plans to inject into Hughes as part of a deal, analysts said, according to the FT. 
|
|
|
|
|
 |
|
