Japan sat deal unfolds

Investors buy into Sky

TOKYO — The dissolution of satcaster DirecTV Japan is unfolding according to plan as seven companies that held shares in the satcaster bought shares in the rival direct-to-home satellite platform that will take it over — Sky PerfecTV.

Leading investor Hughes Electronics, Mitsubishi, Tokuma Shoten Publishing and the others plan to purchase a 10.2% share in Sky PerfecTV, with Hughes holding about a 6.7% share and the other companies less than 1% each. Overall, the companies purchased 182,000 shares with a total value of 9.1 billion yen ($85.9 million).

In addition, Matsushita is planning to buy 55,000 shares with a total value of $2.6 million and the parent company for rival satcaster Wowow will buy 2,000 shares in Sky PerfecTV.

Sub migration

Earlier this month Sky PerfecTV said it would take over rival DirecTV Japan. Under the deal, DirecTV will cease operations by the end of the year while working to help its subscribers migrate to Sky PerfecTV. In addition, DirecTV Japan investors are to buy new shares issued by Sky PerfecTV, which has News Corp., Sony, Fuji Television, Softbank and trading house Itochu as its main investors.

DirecTV will offer free hardware for its subscribers to help them make the change while Sky PerfecTV will remove subscription fees for customers who migrate to its service under the takeover deal.

Reaching break-even point

Under the merger deal, Sky PerfecTV will be able to reach its estimated break-even point of 2 million subscribers and stretch its lead in the satcaster market over rival Japanese terrestrial networks, which will launch new digital channels on a government satellite that will go into operation at the end of the year.

As of the end of February, Sky PerfecTV had about 1.7 million subscribers.

Sky PerfecTV is planning to launch an IPO on the Tokyo Stock Exchange in order to boost its capital base, which will help Sky PerfecTV build its war chest to take on the satellite channels that start up at the end of the year.

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