EchoStar Ready to Split
While some of us resolve to eat better, exercise more, and quit nasty habits, EchoStar Satellite LLC will ring in 2008 by splitting itself into two separate companies. (See EchoStar Sets Split Date.)
Following spinoff plans revealed in the fall, EchoStar Communications Corp. will retain its pay-TV business, while EchoStar Holding Corp. (EHC) will secede to run the bulk of the company's infrastructure assets and technology operations, which includes the set-top box piece of the business. This change will occur January 1. EHC will also absorb the assets of Sling Media Inc. In October, EchoStar inked a $380 million deal to acquire the video "place-shifting" pioneer. (See 'Business as Usual' for Sling Media and EchoStar to Buy Sling Media.)
EchoStar Communications, meanwhile, will change its name to Dish Network Corp., reflecting the brand name of its satellite TV subscription business. (See EchoStar Mulls Spinoff.)
The separation of the two units has already led to speculation that it could open the door to an eventual merger between Dish and its larger satellite TV rival, DirecTV Group Inc. (NYSE: DTV).
Regardless, there's good indication that the new name of the tech spinoff will be short-lived. In an Securities and Exchange Commission (SEC) document filed Monday (December 31), the company noted that EchoStar Holding Corp. represents only the initial name of the split-off company.
"It is anticipated that as part of the transfer of assets in the spin-off, EHC will receive all rights to the trade name and trademark 'EchoStar' and will subsequently change its change to 'EchoStar Corporation'," the company explained.
EchoStar has yet to provide much detail about its plans for the tech unit and what part Sling Media will play in the long term. But, as it noted in the filing, the spinoff could end up competing for business against the Dish pay-TV division.
It's also possible that EchoStar could get into the cable set-top business, now that consumer electronics manufacturers of all sizes can enter that market with devices equipped with CableCARD slots. In fact, Sling Media may have already sparked EchoStar's foray into the world of cable electronics. Earlier this year, Sling obtained certification from CableLabs for a yet-to-be-launched place-shifting device with an embedded Docsis 2.0 cable modem. (See CableLabs Certifies Secret Slingbox Gear.)
EchoStar said the record date for the stock distribution associated with the division was the close of business Thursday, December 27, 2007.
Each shareholder of EchoStar Communications Corp. is set to receive 0.20 of a share of the same class of common stock of EchoStar Holding Corp., which has been approved for listing on the Nasdaq under the "SATS" symbol. Trading in those shares is expected to start on January 2, 2008, the company said.
Shares of Class A common stock of EchoStar Communications Corp. will continue to trade on Nasdaq under the "DISH" ticker.
DISH shares were up $1.08 (2.93%) to $37.99 each in late-day trading Monday.
— Jeff Baumgartner, Site Editor, Cable Digital News