TerreStar Said to Cancel Auction, Proceed With $1.38 Billion Sale to Dish
June 27, 2011
Dish Network Corp. (DISH)’s $1.38 billion deal for TerreStar Networks Inc. is set to go to court for approval after no competing bids were made for TerreStar, a person familiar with the matter said.
TerreStar plans to proceed with the Dish deal after no rival bids were made by a 5 p.m. deadline yesterday, said a person with direct knowledge of the matter who didn’t want to be identified because it isn’t public.
Dish, the second-largest U.S. satellite-TV provider, agreed to buy Reston, Virginia-based TerreStar out of bankruptcy protection, as it makes acquisitions to move beyond its traditional pay-television business. Dish’s agreement was subject to higher bids at an auction that had been scheduled for June 30.
TerreStar, which provides wireless communications using a satellite network, filed for bankruptcy last year. It put itself up for sale after an earlier restructuring plan fell apart. It will seek a judge’s approval for the Dish sale at a July 7 hearing at the U.S. Bankruptcy Court in Manhattan, the person said.
Marc Lumpkin, a spokesman for Englewood, Colorado-based Dish, declined to comment. Arik Preis, a TerreStar lawyer, didn’t respond to an e-mail seeking comment yesterday.
Dish’s deal for TerreStar follows moves by Charlie Ergen, Dish’s chairman, to buy out of bankruptcy video-rental chain Blockbuster Inc. and DBSD North America Inc., another satellite communications company.
