Echo bid gains resonance

Kudelski to back Ergen with a billion bucks

NEW YORK — EchoStar chairman Charlie Ergen may have some help as he seeks to block Rupert Murdoch’s merger with DirecTV parent Hughes Electronics.

Swiss digital TV and tech company Kudelski said Tuesday that it is willing to raise about $1 billion in cash to back Ergen’s competing bid for the satcaster, which was made public over the weekend.

Meanwhile, a Hughes stockholder has filed suit in Delaware Chancery Court to block a deal between Hughes and News Corp. and force Hughes parent GM to hold an auction instead. Shareholder Debbie Wurzel alleges in the suit that GM is unfairly favoring a lower offer by News Corp. because it would pay cash even though holders would be better served by the stock swap proposed by EchoStar.

Ergen himself clearly intends to aggressively defend his proposed deal and started the offensive against News Corp. this week.

Brushing aside regulatory concerns over a merger of the nation’s No. 1 and No. 2 satellite companies, he indicated that an alliance between News Corp. and DirecTV could be much more dangerous. He cited foreign ownership and perils to consumers when a company owns both content and distribution — themes he’s likely to hit on consistently as he tries to derail Murdoch’s plans.

Ergen’s bid offered Hughes shareholders an 18% premium to last Friday’s closing price, although the premium has been eroded along with EchoStar stock over the past two days.

Uneven playing field

“GM has not conducted a fair auction for Hughes but rather has unjustifiably favored News Corp.,” shareholder Wurzel contends, asking a judge to grant the case class-action status on behalf of all stockholders and to halt any News Corp. transaction “that is not the result of an open auction process.”

Neither News Corp. nor GM have made public the terms of Murdoch’s offer, which is believed to include up to $7 billion in cash and notes along with stock.

GM, whose board met Tuesday, has not issued any formal statement in response to EchoStar’s unsolicited bid on Sunday. The automaker has reiterated that it will consider all bona fide offers and that it continues its discussions with News Corp.

By all accounts those talks, which had been dragging on for months, were in their final stages, although EchoStar’s move may delay a deal.

Reps for GM and News Corp. weren’t immediately available for comment.

Cash component

EchoStar had made a previous offer with a cash component that Hughes rejected earlier this summer. Its latest bid, however, is all in stock, although Ergen said he’d be willing to inject some cash if needed.

Ergen said he will wait for a formal response from General Motors before engaging in further conversations with Kudelski or others.

A successful bid by EchoStar, which is Kudelski’s biggest single client for its NagraVision encryption and decoding equipment division, would increase Kudelski’s earnings by as much as 40%, said its chairman, Andre Kudelski. EchoStar accounts for 10%-20% of the division’s sales.

(Reuters contributed to this report.)

More Biz

  • New York City NYC Placeholder

    CityFM Podcast Takes a Deep Look at New York’s Music Scene (Listen)

    First among the many projects listed at the beginning of New York Music Month in June was a WNYE radio show and podcast called CityFM that promised to “explore the city’s music culture, emerging artists and trends, and upcoming events told through the lens of what’s happening around the city in Summer 2019.” And while [...]

  • Live Nation Logo. (PRNewsFoto/Live Nation)

    Live Nation Confirms Placing Tickets Directly on Secondary Market at Artists’ Request

    Representatives for Live Nation, the world’s largest live-entertainment company and owner of Ticketmaster, confirmed that it bypassed conventional channels and directly placed thousands of concert tickets on the secondary market upon artists’ request, in an article published in Billboard. In a statement shared with Variety, the company acknowledged that it has facilitated the transfer of [...]

  • Costume designer Michele Clapton

    Costume Designers Fashion a Plan to Fight for Pay Parity in Upcoming Contract Talks

    The Costume Designers Guild Local 892 is gearing up to fight for pay equity in its 2021 contract negotiations with the Alliance of Motion Picture and Television Producers, establishing a pay-equity committee to raise awareness of the scale disparity between the mostly female CDG membership and the mostly male membership of the Art Directors Guild Local [...]

  • Jussie Smollett

    Jussie Smollett Seeks to Stop Appointment of Special Prosecutor

    Jussie Smollett’s lawyers filed a motion on Friday to overturn the appointment of a special prosecutor in his hate crime hoax case, arguing the appointment would expose the “Empire” actor to double jeopardy. Smollett is seeking to reverse an order issued last month by Judge Michael Toomin, who faulted Cook County State’s Attorney Kim Foxx [...]

  • Katy Perry American Idol judge

    Katy Perry Testifies in ‘Dark Horse’ Copyright Trial

    Katy Perry took the stand Thursday and testified that she had never heard the song “Joyful Noise” before she was accused of infringing on its copyright, according to ABC 7 in Los Angeles. Christian hip-hop artist Marcus Gray and the song’s co-writers claim that Perry’s 2013 track “Dark Horse” uses an uses an instrumental phrase [...]

  • Kannan Alagappan - Dish

    Dish Hires Ex-Telstra Exec Kannan Alagappan as CTO

    Dish Network hired Kannan Alagappan, who has held technology leadership roles with telecom and cloud services providers including Australia’s Telstra, Reliance’s Jio and Rackspace, as SVP and chief technology officer. Alagappan assumes the CTO role after the exit of former chief technology officer Vivek Khemka in August 2018 to join John Malone’s Liberty Latin America. [...]

More From Our Brands

Access exclusive content