EchoStar Corp. will buy satellite Internet services company Hughes Communications Inc. for about $1.34 billion so it can boost its ability to transport data and video via broadband, the company said Monday.
The value is based on Hughes' 22 million outstanding shares. EchoStar, which makes equipment for cable, telecom and satellite TV providers, said the deal is worth $2 billion including debt, which the company said it will refinance.
The buyout, approved by the boards of both companies, gives Hughes shareholders $60.70 for each share they own. This is slightly lower than Friday's closing price of $61.78. But it represents a 31 percent premium over Hughes' closing price of $46.43 on Jan. 19, the last trading day before acquisition rumors drove the stock higher.
Shares of Hughes, which is based in Germantown, Md., fell $2.53, or 4.1 percent, to $59.25 in morning trading Monday.
The companies expect the acquisition to close later this year. Apollo Management-affiliated investment funds own a majority of Hughes' outstanding shares and have approved the deal.
Dish Network Corp., whose chairman Charles Ergen also chairs EchoStar, agreed to buy satellite communications company DBSD North America Inc. for $1 billion on Feb. 1 making it the second satellite deal for Ergen in about two weeks. DBSD was launched to build a hybrid satellite-terrestrial communications network for mobile content. It has been in bankruptcy protection since May 2009. The Dish deal eases its exit from bankruptcy protection.
EchoStar spun off from Dish in January 2008.
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