EchoStar Shares Fall as DirecTV Terminates Acquisition Agreement – EchoStar (NASDAQ:SATS)

DIRECTV announced on Friday that it was terminating its acquisition agreement EchoStar Corporation SATS video distribution business, DISH DBS.

The decision follows the refusal of DISH DBS bondholders to accept EchoStar’s proposed exchange debt offer terms, a critical condition for the deal to proceed.

EchoStar shares fell after the update.

General Director of DirectTV Bill Morrow said that “the proposed exchange terms were necessary to protect DirecTV’s balance sheet and our operating flexibility.”

DirectTV agreed to purchase video business EchoStar for $1 and assume the net debt of Dish DBS. The companies issued an exchange offer for five series of Dish DBS notes with a total face value of approximately $9.75 billion.

DirecTV plans to continue investing in next-generation streaming technologies and developing new packaging options that integrate live television with direct-to-consumer platforms. The company is committed to providing customers with increased flexibility and customized content options to meet changing viewer preferences.

The termination of the DISH acquisition does not affect TPG’s plan to purchase the remaining 70% stake in DirecTV from AT&T Inc. Twhich remains scheduled to close in the second half of 2025. This strategic move is expected to further strengthen DirecTV’s position in the market.

EchoStar reported third quarter loss 52 cents per share, missing analysts’ expected loss of 37 cents. Revenue was $3.89 billion, or 5.3%, below the consensus estimate of $3.909 billion.

Pay TV subscribers fell by 43,000 during the quarter, while Sling TV added 145,000 new users. The company ended the period with 8.03 million pay TV subscribers, including 5.89 million for DISH TV and 2.14 million for Sling TV.

Price Action: EchoStar shares were trading down 3% at $22.86 at last check on Friday.

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Image via DirecTV

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