As expected, DirecTV has formally walked away from the deal that would have merged the company with rival satellite cable provider Dish Network.
“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, CEO of DirecTV said in a statement.
“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,” the statement continued.
EchoStar spokesperson Ted Wietecha told TheWrap that the company respects DirecTV’s decision and will “continue to deliver the excellent customer experience our pay-tv brands are known for.”
“As mentioned on our recent earnings call, we have a more robust foundation to operate and grow EchoStar’s business, independent of this agreement,” Wietecha added.
The aborted deal would have seen DirecTV acquire Dish assets for $1 and $9.75 billion in debt. However, earlier in the week Dish’s bondholders rejected a revised offer from DirecTV in October that could have lowered the minimum loss on $8.9 billion of bonds by $70 million, to $1.5 billion. The deadline to accept that offer was extended to 5 p.m. ET on Nov. 12.
Hamid Akhavan, CEO of Dish parent company EchoStar, told analysts during the company’s third quarter 2024 earnings call that Dish would have a path forward regardless of a DirecTV deal closing.
As part of the deal, DirecTV, private equity firm TPG Angelo Gordon and certain co-investors provided $2.5 billion in financing so Dish could meet its debt maturity in November. It also received an additional $5.6 billion through spectrum secured notes and equity issuances.
If the deal had gone through, TPG would have fully controlled the combined company; TPG is still moving to acquire AT&T’s remaining 70% stake in DirecTV in a separate deal that should close in the first half of 2025.
