TerreStar Networks Looks To Dish's $1.375 Billion Buyout Offer

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News Posted: Fri, Jun 17 2011 2:18 AM
TerreStar Networks started with a big dream. A dream to provide sat-phone communications to all who wanted it. Turns out, not too many people want it, or at leas they don't want to pay for it. Now, the company has selected Dish Network as the opening bidder in an upcoming bankruptcy-court auction. Why? Because Dish offered a whopping $1.375 billion for their mobile communications business.

It's a super serious offer. According to the Wall Street Journal, Dish will be hit with a staggering $27.5 million "breakup fee" if TerreStar chooses to sell to someone else at this point, and any other suitor must top the offer by at least $55.5m in order to "outbid" Dish Network. If Dish wins, that sum will pay off all of TerreStar's $1.1b in secured debt, but of course, all of this would have to be okayed by the FCC.

There's a final deadline set for June 27th (bids), and the auction is set for June 30th. Dish may be ponying up, but there's a lot to gain. TerreStar currently owns government licenses to use select swaths of spectrum (useful for 4G!), and while it's unclear what Dish would do with all of that right away, it's not hard to imagine a future where Dish is providing at least some services over-the-air. Video streaming, mobile data, etc.

It's tough to see a spunky company like TerreStar hit such a rough patch, but at least Dish may salvage things if it all holds as-is.
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AKwyn replied on Fri, Jun 17 2011 6:33 AM

Well... Selling to Dish can offer a lot of possibilities seeing as how they're the big player in the satellite industry. I'm not sure if they're going to buy the company to start their own phone service or if they'll buy it for the spectrum that it holds.

Either way, it seems like a good decision to sell to Dish.


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Dish seems to be strategically buying companies first blockbuster and now the potential for TerreStar. My bet is that they are going for the spectrum more than anything else. Though I am sure they can use the satellites to boost their TV/Media business.

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I have until the 27th? Well let me go check my piggy banks. lol

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