Carey dismisses Pegasus speculation

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The soon-to-be CEO of DirecTV Inc. parent Hughes Electronics Corp. said that even if
the company winds up buying direct-broadcast satellite reseller Pegasus Communications Corp., it wouldn't be
anywhere close to the value implied by the recent runup in the company's stock
price.

Speaking at SkyFORUM in New York Tuesday, Carey said a takeover is "not a
decision for News Corp. to make" until it completes its acquisition of a
controlling interest in Hughes.

But a Pegasus takeover would be based on "the fair value of the cash flows,"
and "current valuations of Pegasus defy the reality of these cash flows."

Pegasus shares have as much as tripled to around $30 each since News Corp. cut its
DirecTV deal, as investors anticipated that News Corp. will want to reclaim
Pegasus' rights to resell the DBS service in the bulk of U.S. rural markets.

Carey said that valuation ignores Pegasus' operating problems and substantial
debt load.

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