Echo bids $1.45 bil for Loral’s birds

Satellite auction will remain open into October

This article was updated at 5:00 PT on August 20, 2003

HOLLYWOOD — In the enviable position of sitting on $2.6 billion in cash, Charlie Ergen’s EchoStar Communications is weighing a possible bid for Loral Space Communications’ six satellites and other assets for $1.45 billion.

Loral, which is involved in a Chapter 11 bankruptcy reorg in Manhattan, said EchoStar made an “informal offer” for the assets subject to due diligence.

Execs at the Denver-based company, operator of the Dish satcasting network, did not immediately indicate when they might indicate when they would file a formal bid. for the Loral assets.

Intelsat has offered more than $1 billion in cash for Loral’s four operating and two under construction North American birds but hasn’t bid on the balance of Loral’s assets. Bidding will remain open in the court-supervised auction into October.

Proposal approved

On Wednesday U.S. regulators actually approved Intelsat’s proposal to purchase the six Loral birds, though a formal offer from EchoStar might thwart an imminent deal.

“EchoStar’s interest reconfirms the value of the assets assembled by Loral over the years,” Loral CEO Bernard Schwartz said. “We will consider all of the bids received very carefully, noting that our current plan is to emerge from the bankruptcy process with a viable, ongoing satellite services and manufacturing business.”

Analysts, however, were uncertain why Ergen would want to venture into the high-risk, slow-growth satellite manufacturing biz. Thomas Eagan of Oppenheimer said he would prefer to see EchoStar use the $1.45 billion to buy back its own stock.

Separately Tuesday, EchoStar and rival satcaster DirecTV filed suit in Tennessee to challenge a sales tax on their services in the state. Action, which follows similar suits filed in Ohio and North Carolina, claims local satcasting customers pay an unfairly higher tax than cable TV subscribers.

(Meredith Amdur in New York contributed to this report.)