Dish stands alone in TerreStar bid: sources

NEW YORK Mon Jun 27, 2011 8:24pm EDT

The sign in the lobby of the corporate headquarters of Dish Network is seen in the Denver suburb of Englewood, Colorado April 6, 2011. REUTERS/Rick Wilking

The sign in the lobby of the corporate headquarters of Dish Network is seen in the Denver suburb of Englewood, Colorado April 6, 2011.

Credit: Reuters/Rick Wilking

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NEW YORK (Reuters) - TerreStar Networks Inc TSTRT.UL did not receive any competing bids for its assets Monday, clearing the way for Dish Network Corp (DISH.O) to acquire the company for about $1.38 billion, according to sources with direct knowledge of the situation.

A 5 p.m. deadline came and went with Dish's $1.375 billion minimum or "stalking horse" bid, submitted June 15, remaining the only offer on the table, said the sources, who spoke on the condition of anonymity because the sale process is private.

Potential challengers to Dish had included TerreStar's senior bondholders, which had sought unsuccessfully to become the stalking horse bidder, and MetroPCS Communications Inc PCS.N, which had said it would explore all options for acquiring new spectrum.

But both groups remained quiet on Monday, according to the sources.

While unlikely, it is possible a bid could come in after deadline, one of the sources said. It is unclear whether such a bid would be allowed by the court.

If no bids are received, TerreStar would likely cancel its auction initially planned for Thursday, the sources said. A sale hearing is scheduled for July 7.

TerreStar, which tried to market the first satellite smartphone, is coveted for its roughly 20 megahertz of spectrum. It filed for bankruptcy in October with more than $1 billion in debt.

If consummated, the sale would be at least the third major acquisition in 2011 for Dish, controlled by billionaire Charles Ergen. The company in March won the right to acquire bankrupt DBSD North America for about $1.4 billion, and recently closed a $320 million deal for Blockbuster Inc BLOAQ.PK.

Ergen, whose burgeoning satellite empire continues to expand, also controls EchoStar Corp (SATS.O), which earlier in June completed the $1.33 billion purchase of Hughes Communications Inc HUGH.O.

Representatives for TerreStar did not respond to requests for comment Monday. Dish declined to comment.

Any superior bid for TerreStar would have had to top Dish's offer by $55.5 million under procedures set by the bankruptcy court. A $27.5 million breakup fee would have been paid to Dish if it had lost to a higher bidder.

The deal is expected to be made public late on Monday, sources said.

The case is in re: TerreStar Networks Inc., U.S. Bankruptcy Court, Southern District of New York, No. 10-15446.

(Reporting by Nick Brown; editing by Carol Bishopric)

(This story is corrected to fix number in paragraph 9)

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