direct paytv merger called off

  1. 5,316 Posts.
    I wonder what this announcement would do to NCP share price ?

    EchoStar, Hughes walk away

    By Luisa Beltran,
    Last Update: 9:35 AM ET Dec. 10, 2002

    NEW YORK (CBS.MW) -- EchoStar Communications and Hughes Electronics said Tuesday that they have reached a settlement to call off their $19 billion merger, effective immediately.

    Terms of the agreement call for EchoStar to pay Hughes a $600 million breakup fee. But EchoStar will not have to buy PanAmSat (SPOT: news, chart, profile), while Hughes (GMH: news, chart, profile), a unit of General Motors (GM: news, chart, profile), will retain its 81 percent ownership stake in the company.

    Littleton, Colo.-based EchoStar (DISH: news, chart, profile) said it would take a nearly $700 million writeoff in fourth quarter because of the breakup fee and other merger-related expenses.

    Since it was announced last year, the EchoStar-Hughes merger has faced opposition. The Department of Justice and the Federal Communications Commission have each moved to block the $19 billion pact, which would have combined the nation's leading satellite-TV providers.

    Still, the companies had tried to push forward with the deal by the Jan. 21 "drop-dead date," when the parties involved were free to walk away.

    "Since the merger couldn't be completed, we concluded that this settlement is the best alternative for Hughes and places us in the best position to move ahead with our business," said Hughes Chief Executive Jack Shaw.

    Shares of Charlie Ergen-led EchoStar rose $2.07 to $21.20 in morning trading Tuesday, while GM gained 66 cents to $38.63 and the Hughes unit dropped 50 cents to $10.80.

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