UPDATE DirecTV (NASDAQ: DTV) said it will abandon its planned acquisition of satellite TV rivals, Echostar’s (NASDAQ: SATS) DISH TV and Sling TV, by November 22, if bondholders do not agree to a debt exchange. DISH bondholders recently rejected DirecTV’s offer, which involved a $1.5 billion reduction in the company’s debt. DirecTV had proposed taking on about $10 billion of DISH’s debt and acquiring DISH DBS for just $1, but bondholder opposition has put the deal at risk, according to Reuters.
This deal was first announced in September, Inside Towers reported. It was part of a strategic consolidation to combat the decline of traditional pay-TV amid growing competition from streaming services.
DISH, under parent company EchoStar and co-founder Charlie Ergen, is already burdened with over $20 billion in debt. Without the deal, DISH could face a tough financial future, especially as pay-TV continues to struggle, reports Reuters.
DirecTV is soon to be fully owned by private equity firm TPG Capital (NASDAQ: TPG). DISH has no plans to make further concessions, according to CNBC sources. Further progress could be made if Ergen were to come to the negotiating table, though that currently seems unlikely, said one of the sources.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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