Speculation that News Corp. was setting the stage to sell off its controlling interest in PanAmSat Corp. – acquired when it purchased a 34% interest in Hughes Electronics Corp. in December – sent shares of the satellite manufacturer to a new 52-week high on Feb. 18.
PanAmSat shares traded as high as $24.23 on Feb. 18, besting the previous high of $23.24 set on Feb. 11, before falling back to $23.60 per share (up 5.5%, or $1.22 each). The rise was fueled by a Wall Street Journal
report that News Corp. had hired investment banker Credit Suisse First Boston to explore a sale of the unit.
The fate of PanAmSat has literally been up in the air ever since News Corp. acquired Hughes, parent of direct-broadcast satellite service provider DirecTV Inc. While PanAmSat has been a big cash-flow generator for Hughes, News Corp. has been more apt to lease satellite space rather than own it.
On Hughes'-fourth quarter conference call with analysts Feb. 10, chairman Chase Carey fueled speculation that the satellite unit would be sold, stating that the company has "begun to evaluate how PanAmSat and HNS fit within a DirecTV-driven strategic vision."