|
PrimeStar deal is done
|
 |
January 22, 1999: 7:39 a.m. ET
Owner of DirecTV expands its reach in $1.82B cash-and-stock deal
|
NEW YORK (CNNfn) - Hughes Electronics Corp. will buy the satellite television businesses of direct-to-home satellite provider PrimeStar Inc. in two transactions totaling about $1.82 billion, the companies confirmed Friday.
The El Segundo, Calif.-based Hughes, which owns the satellite-TV company DirecTV, will acquire PrimeStar's 160-channel, medium-power direct broadcast satellite (DBS) business for $1.32 billion in cash and Hughes stock, and it will purchase the Tempo high-power satellite assets for $500 million in cash.
DirecTV, a PrimeStar rival, has 4.5 million subscribers. PrimeStar has 2.3 million.
In December, Hughes (GMH), a subsidiary of General Motors Corp. (GM), agreed to merge with satellite television service United States Satellite Broadcasting (USSB) in a $1.3 billion deal.
"Our pending transactions with USSB and now PrimeStar will extend DirecTV's market leadership," said Michael T. Smith, chairman and chief executive officer of Hughes Electronics.
"With the addition of the Tempo high-power satellite assets, DirecTV is well positioned to capitalize on such emerging consumer services as high-definition television, data-enhanced broadcasting and other interactive services. We expect to create new and innovative revenue streams that will add significant value for GM Class H shareholders," Smith added.
The transactions have been approved by the boards of both companies and are subject to approval by the GM board, certain PrimeStar lenders, and regulatory and antitrust officials.
The Englewood, Colo.-based PrimeStar is jointly owned by Tele-Communications Inc. (TCOMA), Media One Group (UMG), Cox Communications Inc. (COX), Comcast Corp. (CMCSK) and Time Warner Inc. (TWX) -- the parent of CNNfn. General Electric Co. (GE) owns a small minority stake.
Stock in TCI Satellite Entertainment Inc. (TSATA), the publicly traded part of PrimeStar, has risen recently on rumors of the merger. It closed at 2-9/16, down 11/32, in Nasdaq Stock Market trade Thursday, well above its price of 72 cents a share in mid-December.
Hughes shares closed down 2-3/4 at 44-3/4 on Thursday. 
-- from staff and wire reports
|
|
|
|
|
 |
|
