LITTLETON, Colo. – EchoStar Communications Corp. chairman Charlie Ergen no longer has more than $2 billion of his own money riding on a deal to acquire rival DirecTV.
Credit Suisse First Boston on Monday agreed to provide EchoStar a $2.75 billion loan to replace an unusual financing arrangement in the company's bid to acquire DirecTV, which is owned by a subsidiary of General Motors Corp.
During negotiations the day before the $25.8 billion deal was announced Oct. 28, GM agreed to lend EchoStar the $2.75 billion needed to complete the deal after a financing package fell through at the last minute. Ergen, a former professional blackjack player, used his personal EchoStar shares as collateral.
Deutsche Bank previously agreed to provide EchoStar with the other half of a $5.5 billion financial package that helped EchoStar win the bidding war for Hughes. EchoStar's offer for DirecTV beat a rival proposal from Rupert Murdoch's News Corporation.
The announcement of the financing package brings EchoStar one step closer to pulling of the deal, which would create a satellite TV giant controlling 91 percent of the U.S. digital satellite TV market and 17 percent of the country's pay-television market.
``It crosses one of the hurdles. The first one is financing, the next one will be regulatory,'' said analyst David Kestenbaum of ABN Amro Inc.
EchoStar shares were trading at $23.21, up 43 cents, in Monday afternoon trading on the Nasdaq Stock Market. Hughes' stock was up 34 cents at $13.44 on the New York Stock Exchange.
News Corp. is the parent company of the Fox News Channel, which operates FOXNews.com.