DIRECTV Sweetens Offer to DISH Bondholders to Aid Merger Talks

DIRECTV is once again showing a willingness to bend a little in order to get a major deal done. Late last week, it was reported that DIRECTV’s desire to merge with DISH was being threatened by a group of investors who were unsatisfied with the exchange rate they were being asked to take for their DISH bonds. DIRECTV and DISH’s parent company EchoStar have announced that the offer to those investors has been sweetened, in hopes that these changes will help them get the deal across the finish line.

Key Details:

• Exchange prices for notes held by disgruntled bondholders were increased by DIRECTV in its latest offer.
• There will be no changes in “maturity, interest rate, interest payment dates and covenants” as compared to outstanding notes.
• Investors have until Nov. 12 to signal whether they’ll approve the modified terms or not.

The updated offer from DIRECTV has increased the exchange price that investors are to be paid for their outstanding bonds in DISH’s DBS — the entity that controls pay-TV packages like DISH satellite and Sling TV — by as many as 6.5 percentage points. In short, those bondholders have been offered more money than they were initially tendered to exchange their DBS investments for new notes backed by a merged DIRECTV/DISH.

Other than the revised price that DIRECTV is willing to pay to exchange those bonds, there will not be any substantive changes to the terms agreed to by investors when they initially bought in. “Maturity, interest rate, interest payment dates and covenants” will remain the same except for certain tweaks, according to EchoStar.

“The revised exchange terms represent DIRECTV’s interest in the successful completion of the transaction, which we believe is in the best interest of all parties,” a DIRECTV spokesperson told The Streamable.

The merger between DIRECTV and DISH would create the country’s largest pay-TV company, if it can get past the scrutiny of both investors and government regulators. It would boast nearly 20 million subscribers and would control two highly popular live TV streaming services in DIRECTV STREAM and Sling TV.

DISH investors now have until Nov. 12 to consider and respond to the revised deal terms offered by DIRECTV. If they approve, the merger will move forward, but if they don’t a transaction that has taken years to initiate could be halted in its tracks.