EchoStar rises as some expect sale of Dish Network

Shares of EchoStar Communications Corp. jumped more than 11% before retreating Wednesday as investors speculated further on the possibility the satellite operator might sell its Dish pay TV network.

Market talk has been mounting that Englewood, Colo.-based EchoStar, the No. 2 U.S. satellite TV operator, would put Dish up for sale after the company said last week that it might spin off its technology and wholesale satellite businesses into a new, publicly traded company.

EchoStar stock rose to a 52-week high of $52.15 on Wednesday before pulling back to close at $48.94, up $2.17. The stock has jumped 19% since Sept. 17.

Some industry experts believe AT&T; Inc., the nation’s largest phone company, would be the most likely buyer, using Dish to help it compete better with cable TV operators. It already has a marketing agreement with EchoStar to sell Dish programming with AT&T; services.

There also has been speculation that El Segundo-based DirecTV Group, EchoStar’s larger rival, might try to merge with it. DirecTV shares rose 44 cents to $24.91 on Wednesday.

AT&T; has been building its own fiber-optic network that connects with existing copper wires to deliver pay TV service under the U-verse brand.

“There’s a general recognition internally at AT&T; that their U-verse solution doesn’t work,” said Todd Mitchell, an analyst at Kaufman Bros. “The marketing guys want to buy Dish.”

But others disagreed. Analysts at Merrill Lynch & Co. and JPMorgan Chase & Co. damped takeover speculation by saying AT&T; was unlikely to buy EchoStar.

“EchoStar’s satellite distribution system is entirely separate from AT&T;’s wire-line network,” Merrill’s Jessica Reif Cohen wrote in a note to investors. “An outright purchase seems difficult to justify.”

AT&T; shares fell 49 cents to $41.92.

Representatives from the three companies declined to comment.