DirecTV agrees to buy Pegasus Satellite TV for $938 mn

08/02/04 - newratings.com

NEW YORK, August 2 (New Ratings) – DirecTV Group Inc (DTV) has agreed to buy Pegasus Communications Corporation's (PGTV) satellite television unit for $938 million.

According to the terms of the deal, DirecTV Group, a leading US-based satellite TV company controlled by Rupert Murdoch's News Corp Limited, would pay $875 million in cash for Pegasus Satellite Television. Pegasus Satellite had filed for bankruptcy protection in June this year, after DirecTV and National Rural Telecommunications Cooperative (NRTC) had terminated Pegasus' exclusive contract to distribute DirecTV television services to about 8 million rural households in 42 states.

According to a statement by DirecTV Group, the deal incorporates the dismissal of all previous claims between the two companies, including a $63 million judgment ruled in favour of DirecTV in May this year. In addition, Pegasus Satellite has agreed to sell its broadcast TV stations to Pegasus Communications. Pegasus Satellite's Chief Executive Officer, Marshall Pagon, said that the deal would enable the company to quickly resolve its bankruptcy, with limited risks for creditors. The CEO said in a statement today that the agreements have assured that Pegasus Satellite Television's subscribers would continue to receive the uninterrupted broadcast of DirecTV programming.

The transaction is likely to close within the next four-to-six weeks, following the approval of the US Bankruptcy Court and other regulatory authorities.