EchoStar Corp. Chairman Charlie Ergen has abandoned a quest to gain control of larger rival Hughes Electronics Corp., after his preliminary offer was rebuffed by Hughes and its controlling shareholder, General Motors Corp., The Wall Street Journal reports.
Mr. Ergen's turnaround in the past few days, following two months of jockeying to prepare for a formal bid, appears to clear the way for GM to finally clinch a long-pending deal for Hughes with media mogul Rupert Murdoch's News Corp.
Mr. Murdoch has been battling to take over Hughes, El Segundo, Calif., the nation's largest satellite-to-home broadcaster, to combine with News Corp.'s foreign satellite assets and form a global broadcasting titan with a market value of nearly $50 billion.
The removal of EchoStar as a potential suitor for Hughes means that an agreement with News Corp. is likely in the next few weeks, according to people close to the negotiations. Under Mr. Murdoch's complex proposal, Hughes shareholders would own more than 50% of the combined entity. GM would receive about $7 billion in cash and notes for its 30% interest in Hughes.