Your Daily Briefing Of Satellite

Your Daily Briefing Of Satellite Industry News

FCC OKs Sale of PanAmSat to Equity Firms; Price Cut by $200 Million Because of Galaxy Failure

WILTON, CT, August 13/Satnews Daily/ — PanAmSat Corp. (NASDAQ: SPOT) said Thursday the Federal Communications Commission has approved the sale of PanAmSat to affiliates of Kohlberg Kravis Roberts & Co., L.P., The Carlyle Group and Providence Equity Partners, Inc. The FCC approval, obtained last August 11, was the last in a series of regulatory approvals needed for the completion of the transaction.

DirecTV also said it had cut the price on the sale of in PanAmSat to the three private equity firms by $200 million to approximately $2.6 billion following the failure of a PanAmSat satellite. The price reduction resolves the effect of the xenon ion propulsion failure of Galaxy 10R PanAmSat satellite last August 3. PanAmSat said the agreement does not affect the $23.50 per share purchase price to be paid to the other PanAmSat shareholders.

"Now that we have received all necessary approvals, we are looking forward to the ultimate completion of the deal next week," said Joe Wright, president and CEO of PanAmSat. "We look forward to a great future with our new owners."

PanAmSat expects its shareholders to approve the transaction at their annual meeting today, which will permit the parties to close the merger with a subsidiary of the DirecTV Group on Wednesday, August 18, and the purchase of stock from DirecTV Group on Friday, August 20, assuming the satisfaction of other closing conditions.

"All the pieces are in place to close the transactions next week," said Chase Carey, president and CEO of the DirecTV Group. "This transaction continues to be a good value for our shareholders and enables us to take one more step toward our goal of focusing resources and management time on our core DirecTV business."

Alexander Navab, a partner of Kohlberg Kravis Roberts & Co. L.P., said the equity sponsor partners continue to be excited about owning PanAmSat and that they are pleased with the rapid resolution of these issues.