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DirecTV to buy Pegasus Satellite for $875 million
AP WorldStream via COMTEX
EL SEGUNDO, California, DirecTV Group Inc. will purchase the primary assets of Pegasus Communications Corp.'s satellite-television unit for $875 million in cash.
The deal includes the rights to all DirecTV subscribers activated through Pegasus, a Pennsylvania-based provider of satellite TV to rural parts of the United States.
DirecTV, a satellite TV broadcaster based in El Segundo, said the payment reflects full satisfaction and the dismissal of all claims between the two companies, including the $63 million judgment entered in May in favor of DirecTV against Pegasus. Including that judgment, the total purchase price is about $938 million.
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The number of subscribers to DirecTV services in rural areas has steadily declined in the last few years, and this deal will allow DirecTV to reverse that trend and grow its subscriber base in these areas.
Pegasus Satellite Television, which filed for Chapter 11 bankruptcy protection in June shortly after DirecTV abruptly terminated a distribution deal with the company, is the nation's largest independent provider of DirecTV service. It delivers DirecTV to more than 8.4 million homes in 41 states and serves more than 1 million rural subscribers.
Pegasus had unsuccessfully petitioned a bankruptcy court to order DirecTV to stop what it said was poaching of Pegasus customers. Pegasus argued that DirecTV was taking advantage of its weakened position by trying to get customers to sign up with DirecTV directly. A judge rejected that claim.
DirecTV said the acquisition agreement has been approved by the creditors' committee in Pegasus' Chapter 11 proceedings.
DirecTV expects the deal to close within the next four to six weeks, subject to bankruptcy court approval and to applicable antitrust filings and approvals. It expects the bankruptcy court hearing to approve the transaction will be held in late August. Copyright 2004 Associated Press, All rights reserved Go Back To Articles Page |
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