BREAKINGVIEWS-Dish deal collapse would torch massive windfalls

Reuters11-23

BREAKINGVIEWS-Dish deal collapse would torch massive windfalls

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Jennifer Saba

NEW YORK, Nov 22 (Reuters Breakingviews) - DirecTV ended plans to buy its satellite rival as owner Charlie Ergen refuses to haggle with bondholders balking over a $1.5 bln discount. He’ll be stuck with $10 bln of debt, creditors get left on shaky ground and synergies worth $8 bln vanish in an epic lose-lose-lose.

Full view will be published shortly.

Follow @jennifersaba on X

CONTEXT NEWS

Satellite operator DirecTV said on Nov. 21 it is terminating its deal with EchoStar-owned Dish because Dish bondholders rejected the terms of a debt exchange that required them to accept a $1.5 billion discount.

Under terms of the transaction announced on Sept. 30, DirecTV agreed to buy its pay-TV rival for a nominal $1 and assume $9.75 billion of debt. DirectTV said it expected to generate at least $1 billion of annual cost savings from the combination by the third anniversary of the deal closing, originally expected to be in late 2025.

PJT Partners is DirecTV’s lead adviser and Barclays is advising private equity firm TPG, which is buying 70% of DirecTV from AT&T. JPMorgan is advising EchoStar. Bank of America, Evercore, LionTree and Morgan Stanley also provided advice to DirecTV and TPG.

(Editing by Jeffrey Goldfarb and Pranav Kiran)

((For previous columns by the author, Reuters customers can click on SABA/jennifer.saba@thomsonreuters.com))

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