Lehman Keeps 'Strong Buy' on Hughes Electronics
Lehman Brothers reiterates its strong buy rating on General Motors H (GMH ).
Analyst William Kidd says increased suitor interest can only work to help Hughes shareholders. He says initial market reaction, because of arbitrageurs, likely will be to short Echostar and go long on Hughes. He doesn't take Echostar's offer as anywhere near final, but rather as a means of renewing talks.
Despite Echostar's interest and the benefits of the combination, Kidd says News Corp. likely remains in the driver's seat given General Motor's preference and the stock it controls. He thinks Hughes will likely rush News Corp. to formalize a bid, probably well above the original offer.
Kidd sees a $0.48 2001 loss estimate and a $0.11 2002 loss for General Motors H.