EchoStar acknowledged that it it looking to stage a bid for rival DBS company DirecTV, trying to rip the deal away from News Corp.
In a securities filing Thursday, EchoStar acknowledged that is has long expressed interest to General Motors about buying its Hughes Electronics unit. The DBS operator said that GM notified EchoStar this week that GM was "willing to establish a dialogue between EchoStar's and GM's respective legal and financial advisors so as to better understand a possible transaction." EchoStar did not detail what it might offer.
Ergen has clashed with News Corp. Chairman Rupert Murdoch before, when Murdoch reneged on a deal to become a partner in EchoStar. Though News Corp. is itself strapped for cash, its Sky Global international satellite unit has teamed with Liberty Media and Microsoft to secure equity to pay GM $5 billion or more in cash and the rest in Sky Global stock, creating a $40 billion transaction that would leave GM a partner in the worldwide satellite operation.
Ergen has contended that combining DirecTV with EchoStar would create far greater efficiencies and much greater value for shareholders of both GM and Hughes, which is a tracking stock subsidiary of GM. The auto maker would not comment other than to say its talks with News Corp. are continuing. - John Higgins
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