PANAMSAT CORP. TO BE ACQUIRED BY KKR IN $4.3
BILLION TRANSACTION
EL SEGUNDO, CA and WILTON, CT, April
20, 2004 – PanAmSat Corp. (NASDAQ:
SPOT), and its 80.5 percent stakeholder, The
DIRECTV Group, Inc. (NYSE: DTV), announced today
that they have signed a definitive transaction
agreement with affiliates of Kohlberg Kravis
Roberts & Co. (“KKR”) for the
sale of PanAmSat Corp. at $23.50 in cash per
share. The aggregate transaction value, including
the assumption of approximately $750 million
of net debt, is approximately $4.3 billion.
“Today, PanAmSat is the leading distributor
of video signals in the world, transmitting
more than 2,100 broadcast TV channels globally.
With KKR as our partner, we will have the opportunity
to enhance our competitive position and significantly
expand PanAmSat’s capabilities,”
said Joe Wright, president and chief executive
officer of PanAmSat. “KKR understands
our mission of servicing a strong customer base
in the entertainment, communications and government
sectors, and will support our efforts to grow
by developing new products and services, forging
strategic alliances and developing new markets.
This new alliance puts us on an excellent footing
to build for our future.”
Wright continued, “While we have thoroughly
enjoyed our past association and relationship
with Hughes Electronics, we are ready and excited
about moving forward on our own, and appreciate
the on-going relationship we will have with
The DIRECTV Group companies as customers, affiliates
and friends.”
DIRECTV Group President and Chief Executive
Officer Chase Carey said,
“The sale of PanAmSat is a significant
step toward the completion of our plan to transform
the former Hughes corporate structure to a single
business, with a single focus on DIRECTV, the
nation’s leading digital multichannel
television service. The KKR offer, with its
all-cash structure, provided the best value
to the PanAmSat shareholders.”
“With a strong operational foundation,
broad customer base and significant technological
resources, PanAmSat is poised for solid growth
into the future,” said Alexander Navab,
a KKR Member. “Joe Wright and his management
team have developed a strategic plan designed
to support prudent growth. We look forward to
being their partners as they focus on enhancing
PanAmSat’s position as a global industry
leader in video and data broadcasting services.”
As part of the transaction, The DIRECTV Group
agreed to extend and enhance certain agreements
between itself and PanAmSat, at market rates,
in order to assure future revenue flows to PanAmSat
and continuity of services for its Hughes Network
Systems and DIRECTV Latin America subsidiaries.
Subject to applicable regulatory approvals,
including the Federal Communications Commission,
and also subject to approval by the stockholders
of PanAmSat, the transaction is expected to
be completed in the second half of 2004. The
boards of directors of both PanAmSat Corp. and
The DIRECTV Group voted unanimously in favor
of the transaction.
Credit Suisse First Boston served as financial
advisor to The DIRECTV Group, and Evercore Partners
to the Special Committee of the Board of Directors
of PanAmSat Corporation. Weil, Gotshal &
Manges LLP served as the legal advisor to The
DIRECTV Group; Gibson Dunn & Crutcher LLP
represented PanAmSat; and Simpson Thacher &
Bartlett LLP served as legal advisor to KKR.
About The DIRECTV Group, Inc.
The DIRECTV Group, Inc. formerly Hughes Electronics
Corp. (NYSE:DTV), is a world-leading provider
of digital multichannel television entertainment,
broadband satellite networks and services, and
global video and data broadcasting. The DIRECTV
Group is 34 percent owned by Fox Entertainment
Group, which is approximately 82 percent owned
by News Corporation Ltd.
About PanAmSat Corp.
PanAmSat Corporation (NASDAQ: SPOT) is one of
the world’s top three satellite operators
managing a global fleet of 29 satellites, 24
of which are wholly-owned by the Company, for
the delivery of news, sports and other television
programming. In total, this fleet is capable
of reaching more than 98 percent of the world’s
population through cable television systems,
broadcast affiliates, direct-to-home operators,
Internet service providers and telecommunications
companies. In addition, PanAmSat supports the
largest concentration of satellite-based business
networks in the U.S., as well as specialized
communications services in remote areas throughout
the world.
About KKR
KKR is one of the world’s oldest and most
experienced private equity firms specializing
in management buyouts, with offices in New York,
Menlo Park, California, and London, England.
For more information, please visit www.kkr.com.
This document contains forward-looking
statements within the meaning of the safe harbor
provisions of the Securities Litigation Reform
Act of 1995. Terms such as "expect,"
"believe," "continue," and
"grow," as well as similar comments,
are forward-looking in nature. Although the
Company believes its growth plans are based
upon reasonable assumptions, it can give no
assurances that such expectations can be attained.
Factors that could cause actual results to differ
materially from the Company's expectations include
general business and economic conditions, competitive
factors, raw materials purchasing, and fluctuations
in demand. Please refer to the Company's Securities
and Exchange Commission filings for further
information.
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