July 7 (Bloomberg) -- Dish Network Corp.’s $1.38 billion agreement to buy TerreStar Networks Inc. out of bankruptcy won court approval after no rival bids emerged for the mobile-communications company.
U.S. Bankruptcy Judge Sean Lane at a hearing today in New York approved Reston, Virginia-based TerreStar’s sale to Dish, the second-largest U.S. satellite-television provider.
The TerreStar purchase follows agreements by Charlie Ergen, Englewood, Colorado-based Dish’s chairman, to buy two other companies out of bankruptcy: video-rental chain Blockbuster Inc. and DBSD North America Inc., a satellite-communications provider.
TerreStar, which provides mobile communications through a satellite network, filed for bankruptcy last year with a plan that would have given an ownership stake to EchoStar Corp., where Ergen, 58, is also chairman. A majority of the voting power of Dish and EchoStar is owned by Ergen or his family trusts.
TerreStar dropped the EchoStar-backed plan when it couldn’t get creditor support and put itself up for sale. It reached the deal with Dish subject to higher bids. The planned auction was called off after no other suitors met the bid deadline, TerreStar said in a court filing.
Ergen is interested in TerreStar’s wireless spectrum, which he can combine with spectrum acquired in the DBSD bankruptcy, Walter Piecyk, an analyst at BTIG LLC in New York, said in a June 28 note. Wireless spectrum is rising in value as smartphones become more popular, according to Piecyk.
The case is In re TerreStar Networks Inc., 10-15446, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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