EchoStar jumps as satellite operator hires advisors to explore strategic options
(Reuters) -Shares of EchoStar surged as much as 41% on Wednesday after the satellite operator said it has hired advisors to help evaluate strategic alternatives following its merger with Dish Network.
The merger, which was completed on Dec. 31, was engineered by telecom mogul Charlie Ergen to tackle growing competition from larger U.S. carriers.
EchoStar's stock, which jumped to $17.90, is on track for its biggest daily percentage gain on record and highest level since September last year.
Following the merger, Dish Network also transferred some of its wireless spectrum licenses under the umbrella of a newly formed subsidiary, EchoStar Wireless Holding.
The FTC had said in the approval order that Ergen will beneficially own more than 90% of the voting stock and approximately 54% of the equity of the recombined company.
The transaction would integrate Dish Network's satellite technology, streaming services and nationwide 5G network with EchoStar's premier satellite communication solutions.
In 2008, EchoStar Communications, which was founded by Ergen as a satellite television equipment distributor in 1980, changed its name to Dish Network and spun off its technology arm as a new company named EchoStar Corp. The merger of the two companies reunited his telecom empire.
The company said it has hired Houlihan Lokey and White & Case LLP as financial and legal advisors to help it evaluate strategic options.
The satellite operator did not immediately respond to a request for details about its plans.
"In the absence of explanations from the company itself, we're left to try to figure it out on our own – but what is most important here is that the assets simply aren't being divided up in a way that would facilitate a sale," brokerage MoffettNathanson said in a note.
(Reporting by Harshita Mary Varghese and Jaspreet Singh in Bengaluru; Editing by Shailesh Kuber and Shweta Agarwal)
