Kudelski intervenes in battle for Hughes Electronics
The Swiss digital broadcast technology company, Kudelski, has said it is willing to raise about $1 billion (Sfr1.72 billion) capital to back a $29.8 billion bid by United States satellite TV company EchoStar Communications to take over Hughes Electronics.
In an interview with Reuters, the company’s chairman, André Kudelski, said he had made the offer to EchoStar’s chairman, Charles Ergen, but it was up to EchoStar to decide whether to accept his offer, or choose to go it alone.
Kudelski said he would raise the money by issuing a fresh 25 per cent equity in his company to the stock market.
EchoStar has said it would consider paying for its unsolicited bid with cash as well as shares. EchoStar is seeking to thwart a deal between Hughes and Rupert Murdoch’s News Corp, with the two rivals both wanting to win control of Hughes DirecTV satellite broadcaster.
“What we discussed with EchoStar is that we are willing to help out if there is a need,” Kudelski said on Tuesday. “It is up to them to decide. They know we are on their side.”
EchoStar is the biggest single client for Kudelski’s NagraVision encryption and decoding equipment division, generating an estimated 10-20 per cent of group sales.
Kudelski said that a successful EchoStar bid would boost his company’s earnings per share by at least 40 per cent, on a diluted basis. This is in addition to the normal 25-35 per cent earnings growth projections of the Swiss company.
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