Ergen’s bid — all pie in the sky, say analysts

Analysts indicated Monday that investors are not taking EchoStar’s $32.3 billion bid for Hughes Electronics, operator of DirecTV, seriously. Most suggested that it was highly unlikely that regulators would approve a deal that would eliminate competition in the field of home-satellite distribution. The New York Daily News quoted Mike Pausic, managing director of Maverick Capital, as saying “All [EchoStar Chairman Charlie Ergen] is trying to do is frustrate the General Motors and News Corp board discussions for his own tactical purposes.” Broadcasting and Cable cited a Legg Mason analysis paper that concluded that EchoStar “would face a high hurdle in proving that the benefits of the merger outweigh the costs of eliminating a competitor.” But Ergen said in a conference call Monday that a merger of his DISH Network and DirecTV would revitalize competition between satellite and cable operators. “Cable rates are going up two or three times the rate of inflation,” Ergen remarked during a conference call on Monday. “The only way that’s going to stop is to have a strong satellite operator to compete with those [cable] folks.” Meanwhile, a spokesperson for News Corp said in Sydney Tuesday that the company’s talks with General Motors about acquiring Hughes are continuing, “and we are very happy with the progress of those negotiations.”