As September came to a close, official word that DirecTV had agreed to acquire EchoStar’s video distribution business, including DISH TV and Sling TV services had tongues wagging. Now, the chances of a mega-merger between the nation’s two direct broadcast satellite providers are sagging, as a group of bondholders said no to a revised proposed debt offer’s terms.
“A successful exchange was a condition for acquiring the Dish video business,” a spokesperson for DirecTV told CNBC late Tuesday. “Given the outcome of the EchoStar exchange, DirecTV will have no choice but to terminate the acquisition of Dish by midnight on November 22.”
Does this mean a merger of DirecTV and DISH/Sling is dead? There’s one option remaining and that would require a fresh round of mediation. But, this is viewed as unlikely.
TPG is in the process of acquiring DirecTV. As the EchoStar deal stood, assumption of some $10 billion in debt was key to the deal. That was rejected by a group of bondholders who hold the cards for DirecTV. A revised offer then came, with a 30% discount. That, too, was met with a rejection from the bondholders, Bloomberg reported.
Should Dish and DirecTV not merge, where does that leave Dish and Sling? That’s what some may already be asking, as EchoStar’s properties are presently viewed as untenable given the growth in streaming video consumption and ongoing erosion of the MVPD business.
