AT&T Bid for EchoStar Imminent - Barron's

A recent 24% decline (-18% last week) in the share price of EchoStar Communications puts it back in play for an acquisition by AT&T before the end of the year, according to a report by Barron's. Shares of EchoStar, operator of the DISH Network satellite TV service, came under heavy selling pressure last Monday due to a poor Q3 earnings report (full story). Speculation of a takeover by AT&T had boosted EchoStar's shares to above $50, making a reported $65/share offer by AT&T less attractive. Barron's said EchoStar has demanded $75/share. Aside from EchoStar's valuation, the impetus behind getting the deal done this year is because of next year's presidential election and concerns a victory for Democrats will result in heightened M&A scrutiny, Barron's said, citing a person familiar with the company. "Pushing a deal of this size through the regulatory system takes time, so it may have be done in a month or so, if it is to be done at all." On Friday, Citigroup upgraded EchoStar to a Buy from a Hold, based on attractive valuation and an estimated 65% possibility of the company being acquired by AT&T over the next year. EchoStar rose 0.8% to $39.83 on Friday. AT&T gained 0.5% to $39.55. As of 7:30 A.M., ECN data show a single trade of 100 shares for EchoStar at $53 (+33%), while AT&T is untraded.

Sources: Barron's, MarketWatch, Reuters
Commentary: Details of a Probable Dish Network Spin-off • AT&T Hires Goldman to Advise on EchoStar Buyout - TheStreet • EchoStar Churn Driven by Subprime Woes
Stocks to watch: DISH, T. Competitors: DTV, VZ, CMCSA. ETFs: PBS

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