Weighing A Potential EchoStar-DirecTV Merger

Posted by Kenneth Hudson on Thursday, July 20, 2006 - 10:32 am:

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Posting this in both areas..applies to both! This would certainly be interesting..

Citigroup upgraded shares of DISH Network provider, EchoStar Communications, to "buy" from "sell," following media speculation about the increasing possibility that the company could merge with rival DirecTV Group, according to a Wednesday report.

Research analyst Jason Bazinet said shares of the number two direct broadcast satellite TV provider have performed "reasonably well" in a difficult market since he downgraded the stock to "sell" in January.

"In large part, we believe the strength is due to investor enthusiasm for a potential merger between DirecTV (nyse: DTV - news - people ) and EchoStar (nasdaq: DISH - news - people )," said the analyst. "It is unclear whether a merger between EchoStar and DirecTV will be approved by the Department of Justice or the Federal Communications Commission," he said.

"Our change in rating does not reflect a change in our fundamental view. We're still bearish on DBS fundamentals," noted Bazinet. "However, in the intervening months -- between a potential merger announcement and the subsequent regulatory review -- EchoStar's shares could outperform."

The analyst added that by merging, the two companies could fight off mounting competitive threats and rely on merger synergies to bolster growth in cash flow.

The analyst raised the price target on EchoStar to $39 from $26.

http://www.forbes.com/markets/2006/0...markets18.html

Kenneth
http://www.eHDMI.com