In this article, DirecTV is discontinuing its acquisition of Dish assets due to a group of bondholders declining the terms of a proposed debt offer, as stated by a DirecTV spokesperson. The spokesperson mentioned that a successful exchange was necessary for acquiring the Dish video business. Consequently, DirecTV will be compelled to terminate the acquisition of Dish by midnight on Nov. 22 following the outcome of the EchoStar exchange.
Sources familiar with the matter, who preferred to remain anonymous, indicated that DirecTV does not intend to make further concessions. However, there is a possibility of progress if Dish and co-founder and Chairman Charlie Ergen engage in negotiations, although this prospect appears unlikely at present.
DirecTV, soon to be fully owned by private equity firm TPG, was set to take on approximately $10 billion of Dish debt and pay a nominal $1 for acquiring Dish DBS, encompassing both Dish and Sling TV. The original deal faced opposition from a group of bondholders, leading DirecTV to propose a revised offer valuing Dish bonds at slightly over 70 cents on the dollar.
Reports on DirecTV’s intentions were initially disclosed by Bloomberg. The bondholders, a significant segment of Dish’s creditor base, rejected the revised offer earlier this week.
The anticipated collapse of the deal would place Dish in a challenging financial situation. The pay TV sector has been experiencing a prolonged and escalating decline, with Dish’s parent company EchoStar reporting disappointing earnings on Tuesday, causing shares to drop by nearly 13%.
A representative for EchoStar did not respond immediately to a request for comment, while a representative for TPG also did not provide an immediate comment.
WATCH: DirecTV CEO on Dish and Sling TV deal
