Pay television provider DirecTV on Thursday officially announced it will terminate its agreement to acquire rival satellite company Dish Network and its streaming service Sling TV from Echostar this week.
In a statement received by The Desk, DirecTV said it notified Echostar of its intent to talk away from the deal on Friday, November 22, one minute before midnight Eastern Time.
The decision comes after Echostar failed to convince Dish Network’s creditors to accept a bond exchange offer that would have lowered its existing debt obligation by $70 million. The deal would have seen creditors exchange $9.75 billion in current debt for new bonds that would have extended out the maturity date with a minimum loss of $1.5 billion.
Earlier this month, reports indicated some of Dish’s creditors believed that was not financially feasible, and were holding out hope that Dish and DirecTV would agree to cut minimum losses by $300 million. On November 11, a consortium of creditors formally rejected Dish’s bond exchange offering.
“While we believed a combination of DirecTV and Dish would have benefitted all stakeholders, we have terminated the transaction because the proposed Exchange Terms were necessary to protect DirecTV’s balance sheet and our operational flexibility,” Bill Morrow, the CEO of DirecTV, said in a statement received by The Desk on Thursday. “DirecTV will advance our mission to aggregate, curate, and distribute content tailored to customers’ interests by pursuing innovative products and providing customers with additional choice, flexibility, and control. We are well positioned for the future with a strong balance sheet and support from our long-term partner, TPG.”
DirecTV said the dissolution of its agreement to acquire Dish Network and Sling TV does not affect a separate deal that involves TPG Capital acquiring AT&T’s 70 percent stake in the DirecTV business.
DirecTV says it will maintain its commitment to invest in next-generation streaming platforms and “revolutionize the industry through new packaging options while integrating content from live TV alongside direct-to-consumer services.”
In addition to its flagship satellite service, DirecTV operates U-Verse (formerly AT&T U-Verse) and the streaming service DirecTV Stream.
