[SatNews] Reuters is reporting that Hughes Communications Inc (HUGH.O), majority owned by private equity firm Apollo APOLO.UL, has hired Barclays Capital (BARC.L) to advise on a sale of the company, people familiar with the matter said.
Broadband satellite services company Hughes, in which Apollo has a 57 percent stake, has received a first round of bids and drawn interest mostly from other private equity firms and several satellite firms, four sources told Reuters on Thursday. A second round of bids is expected for early February, one of the sources said.
Hughes shares surged as much as 30 percent to their highest level in about three years. The stock closed up 10.9 percent at $51.49 on the Nasdaq stock exchange on Thursday, valuing the company at more than $1.1 billion. Hughes is one of the world's largest providers of broadband satellite services and its systems support high-speed Internet access, video conferencing and VoIP (voice over Internet protocol) telephony. The company provides managed network services for a number of large enterprises — including Wal-Mart (WMT.N), General Motors (GM.N) and Best Buy (BBY.N) — as well as government agencies and households.
The sale of Hughes would allow Apollo, which has been a major shareholder in the company since late 2004, to exit its investment. Barclays has offered staple financing —- so called because details of the financing are stapled to the back of a deal sheet — to potential buyers, one of the sources, who have asked not to be named as they are not authorized to speak with the media. Hughes Communications posted $54 million in operating income in the first nine months of 2010 on revenues of $761.8 million.