DirecTV Unloads PanAmSat to KKR4/20/2004 6:46 AM Eastern
The DirecTV Group Inc. said Tuesday that it has reached an agreement to sell its 80.5% stake in PanAmSat Corp. to Kohlberg Kravis Roberts & Co.
The deal valued DirecTV’s PanAmSat shares at $23.50 apiece, making the transaction’s total value approximately $4.3 billion, including KKR’s assumption of some $750 million of net debt.
DirecTV Group also agreed to extend and enhance certain agreements between itself and PanAmSat, at market rates, in order to ensure future revenue flows to PanAmSat and continuity of services for its Hughes Network Systems and DirecTV Latin America units, the company said.
“The sale of PanAmSat is a significant step toward the completion of our plan to transform the former Hughes [Electronics Corp.] corporate structure to a single business, with a single focus on DirecTV, the nation's leading digital-multichannel-television service,” DirecTV Group CEO Chase Carey said in a prepared statement.
“The KKR offer, with its all-cash structure, provided the best value to the PanAmSat shareholders,” he added.
The companies expect the deal to be completed in the second half of 2004. The transaction is subject to applicable regulatory approvals, including that of the Federal Communications Commission, as well as approval by PanAmSat stockholders.