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EchoStar postpones suit to allow DirecTV to consider bid

LONDON - US satellite TV broadcaster EchoStar has agreed to postpone an antitrust filing against DirecTV, in a move that will allow the General Motors-owned broadcaster to consider a bid from its smaller rival.

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EchoStar filed a lawsuit in a federal district court in Colorado accusing DirecTV of threatening financial harm to retailers that offered both DirecTV and EchoStar services.

In response, DirecTV filed a motion for summary judgement in the suit, which if granted, would automatically decide the case in its favour without a lengthy trial.

EchoStar, which had been required to file its opposition to the motion yesterday (May 30), agreed to extend the deadline until June 12.

The agreement removes a major obstacle in EchoStar's path as it prepares a bid to snatch DirecTV from under the nose of News Corporation, which has been in lengthy and fruitless negotiations to buy DirecTV. News Corp chairman, Rupert Murdoch, is desperate to break into the US direct-to-home TV market following his success in European, Asian and Latin American markets.

General Motors directors approved formal merger talks with News Corp at the beginning of this month after Murdoch restructured an earlier deal, which it is understood did not include sufficient cash. However, GM is obligated to consider other bids.

EchoStar's shares fell 2% yesterday to $31.6 while those of DirecTV's owner Hughes, a division of General Motors, slid 2.8% closing at $23.23. News Corp closed down 2.7% at $36.09.

DirecTV currently has a counter suit pending accusing EchoStar of false advertising about its right to offer network programming, among other claims.

DirecTV has around 9.5m subscribers while EchoStar has around 5m.

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