EchoStar Buying Hughes in $2 Billion Deal
EchoStar (NASDAQ:SATS) agreed on Monday to buy out Hughes Communications (NASDAQ:HUGH) in a $1.33 billion deal that places a 31% premium on the broadband satellite network provider.
The bid values Germantown, Md.-based Hughes at about $60.70 a share and is backed by Apollo Management, the majority owner of Hughes. When debt is included, the transaction’s total value reached $2 billion.
EchoStar said the acquisition will “greatly enhance” its ability to transport video and data at broadband speeds.
“By combining Hughes' operational strength and proven record of customer satisfaction with EchoStar's expertise in cutting edge satellite video technology, customers will benefit significantly from our shared institutional excellence,” Hughes CEO Pradman Kaul said in a statement.
The transaction carries a solid premium of 31% over Hughes’ closing price of $46.43 on January 19., the day before reports broke Hughes had hired bankers to explore a sale.
Shareholders may have been holding out for a greater premium, however, as Hughes’ stock slid 3.69% to $59.50 ahead of Monday’s open.
The companies said they expect the deal to close later this year.
"With a rich engineering culture, an extensive fleet of owned and leased satellites, and experienced personnel in communications centers around the world, the combination of EchoStar and Hughes will create a powerful leader in video and data transport,” EchoStar CEO Michael Dugan said.