DirecTV says Dish purchase is off (original) (raw)

A Dish Network satellite dish (L) is mounted next to a DirecTV dish on the roof of an apartment building on April 15, 2013 in San Rafael, California.

Justin Sullivan | Getty Images News | Getty Images

DirecTV is abandoning its acquisition of Dish assets after a group of bondholders refused to accept the terms of a proposed debt offer, a DirecTV spokesperson said.

"A successful exchange was a condition for acquiring the Dish video business," the spokesperson said in an email Tuesday. "Given the outcome of the EchoStar exchange, DirecTV will have no choice but to terminate the acquisition of Dish by midnight on Nov. 22."

DirecTV does not plan to offer further concessions, according to people familiar with the matter who requested anonymity to discuss confidential information. Further progress could be made if Dish and co-founder and Chairman Charlie Ergen were to come to the negotiating table, though that currently seems unlikely, said one of the people.

DirecTV, which will soon be wholly owned by private equity firm TPG, would have assumed roughly 10billionworthofDishdebtandpaidanominal10 billion worth of Dish debt and paid a nominal 10billionworthofDishdebtandpaidanominal1 to acquire Dish DBS, which includes both Dish and Sling TV. But the initial deal was quickly 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 first to report on DirecTV's plans.

Those bondholders, who constitute a sizable portion of Dish's creditor base, rejected the renewed offer earlier this week.

The likely collapse of the deal would leave Dish in a difficult financial position. Pay TV has been in a long and accelerating decline, and Dish parent company EchoStar on Tuesday reported earnings that disappointed investors, sending shares plunging nearly 13%.

A representative for EchoStar didn't immediately return a request for comment. A representative for TPG didn't immediately provide a comment.

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