EchoStar Communications Corp. has called off its merger attempt with DirecTV Inc.
It will pay a $600 million breakup fee, but it will not have to pony up $2.7
billion for Hughes' interest in financially deteriorating PanAmSat Corp.
That leaves EchoStar with lots of cash -- $3.7 billion -- to "continue to seek
alternative, innovative ways to provide competition to the rapidly consolidating
cable industry and to provide more choices for all consumers," according to
chairman Charlie Ergen.
Both the Federal Communications Commission and the Department of Justice had weighed
in against the merger.
While EchoStar tried to recraft a more government-friendly deal, its
prospects of success were dim, while the prospects for getting a new deal
approved before the $600 million fee kicked in were nil. EchoStar will have to
write off about $700 million in the fourth quarter to account for the breakup
and other fees associated with the aborted merger.