Echostar shares up on AT&T buyout speculation

NEW YORK, Oct 16 (Reuters) - EchoStar Communications Corp (DISH.O: Quote, Profile, Research, Stock Buzz) shares rose 4 percent on Tuesday on speculation that No. 1 U.S. telephone company AT&T Inc (T.N: Quote, Profile, Research, Stock Buzz) could buy the satellite television provider within a year.

EchoStar shares rose $1.98 to $51.02 on Nasdaq after Citigroup analyst Jason Bazinet said there was a 65 percent chance the long-rumored deal could finally happen in the next 12 months in a note to clients issued late on Monday.

Bazinet said the addition of Echostar's television service would complement AT&T's efforts to expand a high-speed fiber network it is building to sell TV services to better compete with cable and telecommunications rivals.

Bazinet said EchoStar's announcement on Sept. 25 that it was considering spinning off its technology assets could affect the timing of a deal.

A "spin may force AT&T's hand or facilitate a transaction," Bazinet said.

For example, if AT&T and EchoStar recently had acquisition talks, a spin could prevent an acquisition for two years, the analyst said.

But he noted that, if the companies have not had discussions, the spin-off would improve the prospects for a deal as it would isolate "assets of potential interest to AT&T" from EchoStar's technology assets such as Sling Media.

EchoStar plans to buy Sling Media, whose technology lets viewers pipe their favorite TV programs onto laptops and cell phones.