Dish Bids $1.4 B for TerreStar to Gain Broadband Spectrum
After DBSD North America and Blockbuster, Dish Network (NASDAQ:DISH) is now planning to acquire Terrestar Networks and has bid $1.37 billion for this distressed company. [1] TerreStar Networks is involved in providing satellite terrestrial mobile broadband network for voice and data services, which could help Dish against competitors like DirecTV (NASDAQ:DTV), Comcast (NASDAQ:CMCSA), Time Warner Cable (NYSE:TWC), AT&T (NYSE:T) and Verizon (NYSE:VZ).
There are some visible similarities in Dish Network’s recent acquisitions. Firstly, Dish is trying to spend cash on assets which it can get on the cheap that are often in bankruptcy and being sold as distressed prices. Secondly, it is securing assets that would help it launch a competitive data and/or voice service in the future.
Dish seems to be playing a high stakes game, which could have long-lasting effects if executed right. This could translate into a higher fee per subscriber from possible expansion of services like Blockbuster and satellite broadband, along with higher market share if customers find Dish’s new offerings compelling. It is still too early to tell how these if these moves will pay off investors are taking notice.
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Our price estimate for Dish Network stands at $31.50 implying a premium of about 15% to the market price.
See our complete analysis for Dish Network
Notes:- Dish Network Bids $1.37 Billion for TerreStar, The New York Times, Jun 15 2011 [↩]