Denver -- Luck was not on the side of PrimeStar Inc. last
week. To add insult to the injury of the U.S. Department of Justice's decision to
block PrimeStar's proposed merger with American Sky Broadcasting, it happened on the
same day that the company had prepared to price a $400 million high-yield bond offer.
Last Friday morning, the company announced that it would
defer its offer of the senior subordinated notes until market conditions were more
Last Tuesday, top PrimeStar executives had just completed a
two-week road show to push the company's high-yield debt offer to investors. When the
DOJ dropped its bombshell that morning, PrimeStar said it would delay the offer to give
the company time to send out supplemental documents to potential buyers. By last Friday,
the company expanded the delay, giving no immediate time frame for going forward.
Ted Janco, a direct-broadcast satellite analyst with Janco
Partners, said the postponement made sense. PrimeStar executives "basically feel like
they had the chair yanked out from under them," he said. "That's not a
great time to be pricing bonds."
Janco suggested that PrimeStar would not need to wait until
the DOJ matter was settled before continuing.
"They're just letting the smoke clear a little
bit," he said.
Dan O'Brien, president and chief operating officer of
PrimeStar, told reporters last week that he didn't believe that the timing of the DOJ
decision was coincidental.
"If the Department of Justice really wanted to screw
up PrimeStar, what better time than after they'd completed the road show, but before
they'd sold the bonds?" asked Steve Blum, president of DBS consultancy Tellus
Joel Klein, assistant attorney general with the DOJ's
antitrust division, told reporters that his timing had nothing to do with PrimeStar's