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Speculation Mounts Regarding Possible PanAmSat Sale

By | March 19, 2004

      The likely sale of PanAmSat [SPOT] was reflected in recent reports from two satellite analysts who focused on the valuation of the company and its newly renamed parent rather than leaving any doubt that a deal would occur.

      By renaming Hughes Electronics as The DirecTV Group and changing the ticker from HS to DTV this week, the News Corp-led [NWS] organization is positioning itself to focus attention and resources on its satellite television operation. Thomas Eagan, a satellite and cable analyst with Oppenheimer, issued a research note today predicting DirecTV Group’s PanAmSat [SPOT] and Hughes Network Systems (HNS) business units would be sold. He also forecast a combining of the two News Corp-owned Latin American satellite television operations.

      A rationalizing of the company’s divisions will enable DirecTV Group to report higher company cash flow growth while more easily showing that it trades at a lower multiple on a cash-flow and per- subscriber basis than Wall Street analysts previously had calculated, Eagan explained.

      Patrick Fuhrmann, a satellite analyst with ABN AMRO, said speculation about the sale of PanAmSat now has the company’s stock price fully valued. PanAmSat’s negotiating power to boost the price further appears limited due to a “small universe of potential buyers,” he added.

      For in-depth coverage of this story, see the March 22 issue of Satellite News. For more information about subscribing to PBI Media’s satellite newsletters, check out our Web site at

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