Charlie Ergen just wants to unleash value for satellite TV investors.
The loquacious chairman and chief executive of No. 2 satellite television company
dropped a series of hints Thursday that his company might make a run at the biggest satellite TV provider,
unit (which owns DirecTV) on the block.
"There is no combination of companies that would unleash as much value," Ergen said. "Don't write that we are buying Hughes, but we do see lots of synergy."
Ergen said cost savings from combining the direct broadcast satellite services could reach "tens of billions of dollars" because of efficiencies in satellite and uplink costs, and the lack of satellite exclusivity premiums for programming. It is unclear how any deal between DirecTV and EchoStar could really be done; some analysts say Hughes could fetch as much as $60 billion. EchoStar's market value at the market's close Thursday approached $23 billion. Ergen declined to comment when asked if he has had specific talks with GM on DirecTV, but added that "we haven't looked at the books."
"We're very interested in looking at something that makes financial sense for our shareholders," he said.
DirecTV is expected to have some 10 million subscribers by the end of the year, EchoStar around 5 million subscribers.
Ergen's comments, made at a conference in New York hosted by an industry trade group, the
Satellite Broadcasting and Communications Association
, come as word emerged that financier Carl Icahn has sold all his shares in GM weeks after the company announced that Icahn planned to
buy as much as 15% of the company.
Icahn reportedly intended to buy a chunk of GM to force the company to unload the Hughes unit because GM shares have not gotten credit for the Hughes assets. GM has said it is considering selling Hughes and will make a decision "in months." Wall Street observers
are the likeliest buyers of the unit.
A GM spokeswoman said Friday morning that Icahn's initial interest in GM didn't have any effect on the company's Hughes strategy, so his decision to sell his GM stake won't have any impact, either.
Earlier Thursday at the same satellite conference, former DirecTV boss and Hughes corporate senior executive vice president Eddy Hartenstein said GM and Hughes had "an obligation to shareholders" to consider all possible alliances for the company. Hartenstein said Hughes was exploring which of its "suppliers and partners" might be a suitable investor in Hughes.