A Dish Network hanger-on dish (L) is mounted next to a DirecTV dish on the roof of an apartment building on April 15, 2013 in San Rafael, California.
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DirecTV is abandoning its acquisition of Dish assets after a group of bondholders refused to assent to the terms of a proposed debt offer, a DirecTV spokesperson said.
“A successful exchange was a condition for acquiring the Dish video function,” the spokesperson said in an email on Tuesday. “Given the outcome of the EchoStar exchange, DirecTV will have no choice but to sign off the acquisition of Dish by midnight on Nov. 22.”
DirecTV does not plan to offer further concessions, according to people familiar with the of importance who requested anonymity to discuss confidential information. Further progress could be made if Dish Chairman and co-founder Charlie Ergen were to be shown to the negotiating table, though that currently seems unlikely, said one of the people.
DirecTV, which will in a wink be wholly owned by private equity firm TPG, would have assumed roughly $10 billion worth of Dish encumbrance under obligation and paid a nominal $1 to acquire Dish DBS, which includes both Dish and Sling TV. But the initial deal was straight away contested by a group of bondholders. DirecTV made a revised offer that valued Dish bonds at a little more than 70 cents on the dollar.
Bloomberg was beginning to report on DirecTV’s plans.
Those bondholders, who constitute a sizable portion of Dish’s creditor base, rejected the transformed offer earlier this week.
The likely collapse of the deal would leave Dish in a difficult financial importance. Pay TV has been in a long and accelerating decline, and Dish parent company EchoStar on Tuesday reported earnings that thwarted investors, sending shares plunging nearly 13%.
A representative for EchoStar didn’t immediately return a request for comment. A Councillor for TPG didn’t immediately provide a comment.
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