ION Rejects EchoStar’s $2.13B Bid
New York Post : ION Close to Approving Tender Offer from NBC Universal, Citadel
By Linda Moss -- Multichannel News, 5/3/2007 7:39:00 AM
EchoStar Communications made a $2.13 billion bid for ION Media Networks, which was rejected, theNew York Post reported Thursday.
The disclosure came in a Post story that said ION was close to approving a tender offer from NBC Universal and Citadel, a hedge fund and ION’s largest investor. That offer sparked an outcry from a group of angry shareholders, who claimed that the $100 million NBC U and Citadel are anteing up is too low a price.
According to the Post, the disgruntled shareholders are threatening to sue ION’s board if it approves the NBC U-Citadel offer, in part due to the overture made by EchoStar.
The story quoted a letter from lawyer David Friedman, who represents the dissident investors, which said “a well-capitalized strategic buyer” had made an offer of $2.13 billion in cash for ION. The offer came from EchoStar, according to the Post.
“We have demanded that the company publish the competing offer,” Friedman said in the letter.
Friedman and Ion couldn’t be reached for comment Thursday. EchoStar declined to comment.
The offer from EchoStar was subject to the approval of NBC U and had conditions attached, according to the Post.
ION, formerly called Paxson Communications, was founded by Bud Paxson. It owns 60 TV stations and has its own network.
Paxson got out of the business in November 2005, and NBC U, under federal regulations, had to transfer control of his stake to a strategic partner. Under the NBC U-Citadel deal, NBC U could keep its minority stake in ION with Citadel as its partner.
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