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EchoStar shares jump
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November 30, 1998: 12:04 p.m. ET
Company's stock up 10 percent after inking deal with News Corp., MCI
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NEW YORK (CNNfn) - Shares of EchoStar Communications surged more than 10 percent Monday after the satellite company announced it will sell a 37 percent stake to News Corp. and MCI WorldCom.
The Littleton, Co.-based satellite company also reported it will drop its lawsuit against Rupert Murdoch's media conglomerate.
EchoStar (DISH) stock was up 3-11/16 to 38-11/16 at midday.
Under the deal, News Corp. will acquire 24.3 million EchoStar shares and MCI WorldCom will receive 5.97 million shares. In exchange, EchoStar will attain two satellites to be delivered in orbit and a Gilbert, Ariz.-based direct broadcast operations center. EchoStar also agreed to carry Fox News on its satellite TV service, DISH Network.
As part of the transaction, EchoStar has agreed to drop its $5 billion lawsuit against News Corp. The satellite company sued the Australian media giant for breach of contract last year after News Corp. backed out of a deal to acquire a 50-percent stake in EchoStar.
In addition, NDS Limited, a subsidiary of News Corp., will purchase 500,000 satellite set-top boxes from EchoStar by Dec. 1, 2002 and MCI WorldCom will receive the non-exclusive rights to bundle EchoStar's DBS service with MCI's telephone service.
Shares of News Corp. (NWS) fell 1/4 to 28-1/8, while MCI WorldCom stock (WCOM) dropped 1-5/8 to 60-13/16 late Monday morning.
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