Dish /Direct Merger Hits A Roadblock

[Bruce]

And more news-

Creditors to US satellite television firm Dish Network told DirecTV’s attorneys that the current merger proposal that calls for them to take an almost $1.6 billion loss is “unworkable,” according to a letter seen by Bloomberg.

DirecTV rejected a counteroffer from the group of bondholders, which holds about $8.9 billion of Dish notes, that proposed to adjust a debt exchange that the merger will be contingent on. Going forward, DirecTV can negotiate further, close the acquisition as is and “pay a premium to do so,” or face continued litigation, the group said.

The group said the two companies have “crafted a deal that allows DBS’s shareholder to further siphon billions of dollars of value away from DBS, while asking DBS’s creditors to voluntarily forfeit over $1.56 billion in value they are owed,” according to the letter. “It should be no surprise to anyone that such a deal is unworkable.”

Dish Lenders Call DirecTV’s Current Merger Proposal ‘Unworkable’

(Bloomberg) -- Creditors to US satellite television firm Dish Network told DirecTV’s attorneys that the current merger proposal that calls for them to take an almost $1.6 billion loss is “unworkable,” according to a letter seen by Bloomberg. Most Read from BloombergRobotaxis Are No Friend of...

finance.yahoo.com

The link I posted was updated, this was added-

DirecTV is threatening to walk away entirely if there’s no agreement on the exchange by Oct. 29.

 

[b4pjoe]

The link I posted was updated, this was added-

DirecTV is threatening to walk away entirely if there’s no agreement on the exchange by Oct. 29.

So in just 3 days Tuesday is do or die day...the previous date mentioned was Nov. 9.

 

[MikeD-C05]

I don't think TPG buying the remaining 70% of DIRECTV was dependent on the purchase of DISH.

I think you are right. But TPG had to pay like $7.6 billion for the 70% that ATT owned. Which means if DISH isn't going to be part of the new company, they will be a short-lived business - since DIRECTV satellites are getting up there in age and there are no replacements ordered. To be honest, I feel satellite TV is not long for this world anyway, between people churning because prices going up every year. It is a vicious cycle that repeats over and over ,causing more churn.

 

[prushing]

Or TPG uses this to get out of the stupid deal, would read like this-

‘We could not come into agreement with the bond holders, so we have decided not to move forward with the planned purchase of Dish Network assets.’

Just because you don't see the value in the deal doesn't mean others don't. TPG won't change their mind and just back out. If the creditors force a change of terms, then sure they probably will walk away but that wouldn't be getting out of a stupid deal.

I think most people here are questioning the value. We aren't TPG, though, and guaranteed cash payments, no large costs, only overhead, enables them to get monthly income for 2 years or so. They can write-off the debt or any paper loses and maybe somehow it is worth it to them.

 

[prushing]

So in just 3 days Tuesday is do or die day...the previous date mentioned was Nov. 9.

More posturing. I think the 11/9 date is when the payment was due. Both sides are in the power seats and DISH is caught in the middle. Without a deal, DISH goes away. Unless the creditors want to assume ownership of DISH, they should approve the deal but want to try and get their piece of the pie.

 

[HipKat]

Just because you don't see the value in the deal doesn't mean others don't. TPG won't change their mind and just back out. If the creditors force a change of terms, then sure they probably will walk away but that wouldn't be getting out of a stupid deal.

I think most people here are questioning the value. We aren't TPG, though, and guaranteed cash payments, no large costs, only overhead, enables them to get monthly income for 2 years or so. They can write-off the debt or any paper loses and maybe somehow it is worth it to them.

It's a tough sell but they need to convince the shareholders that a loss today is part of setting the groundwork for a stronger, more valuable investment tomorrow. With all that coverage in TV and streaming, the commercial applications (Bars and restaurants don't stream), it makes logical sense to stay in.

 

[navychop]

Bondholders. They’re the ones needing convincing.

 

[nelson61]

Or TPG uses this to get out of the stupid deal,

Far from being stupid, TPG did not fall off the turnip truck when they bought into a supposedly failing business -Directv - and are making money on the deal

They intend to do the same with Dish using their "insider" Directv statistics to do the analysis.

Think of the business as a old cash cow annuity with decreasing annual payouts.

They have done the numbers, projected the annual loss of customers and annual decrease in income and discounted it all to present value.

Then they put some risk premium on it, assigned an acceptable rate of return and made their offer.

 

[dishdude]

Far from being stupid, TPG did not fall off the turnip truck when they bought into a supposedly failing business -Directv - and are making money on the deal

They intend to do the same with Dish using their "insider" Directv statistics to do the analysis.

Think of the business as a old cash cow annuity with decreasing annual payouts.

They have done the numbers, projected the annual loss of customers and annual decrease in income and discounted it all to present value.

Then they put some risk premium on it, assigned an acceptable rate of return and made their offer.

And if Charlie's wireless business is successful, they truly will have bought Dish for $1.

 

[John2021]

I know someone asked about uverse tv. From what I can gather att still owns that and tgp only bought direct. I could be wrong though

 

[b4pjoe]

I know someone asked about uverse tv. From what I can gather att still owns that and tgp only bought direct. I could be wrong though

 

[Foxbat]

That AI Overview is just trash. DirecTV didn't exist before U-verse?

 

[Bruce]

That AI Overview is just trash. DirecTV didn't exist before U-verse?

It is correct, when AT&T spun it off, TPG took charge, it was a new company/corporation called DirecTV (yes, the same name).

 

[Foxbat]

How about the assertion that TPG owns 100% of DirecTV when the deal has not gone through yet?

 

[b4pjoe]

How about the assertion that TPG owns 100% of DirecTV when the deal has not gone through yet?

The AI overview clearly states the sale is expected to close in the second half of 2025.

Blame Google for the AI overview if you want but there is nothing false in the overview that was posted.

 

[harshness]

Far from being stupid, TPG did not fall off the turnip truck when they bought into a supposedly failing business -Directv - and are making money on the deal

DIRECTV is funneling a lot of its profits to AT&T as a 70% partner in the JV. I doubt that they are printing money like the pre-AT&T DIRECTV did.

 

[harshness]

Or TPG uses this to get out of the stupid deal, would read like this-

We're being bombarded with enough fake news as it is. No need to create any more.

 

[nelson61]

DIRECTV is funneling a lot of its profits to AT&T as a 70% partner in the JV. I doubt that they are printing money like the pre-AT&T DIRECTV did.

Of course, it generates less income each year. But, it clearly is meeting or exceeding TPG's return on investment goals or they would not be pushing to acquire all of DIRECTV and Dish.

TPG, by the nature of their business, has 10's or maybe hundred's of opportunities to invest their money. They pick the ones they think will most increase their shareholder value. This deal made the criteria to invest billions.

 

[harshness]

But, it clearly is meeting or exceeding TPG's return on investment goals or they would not be pushing to acquire all of DIRECTV and Dish.

It may not be as simple as that. Maybe TPG couldn't get AT&T to buy into some of the suitors that TPG had lined up. They're number one responsibility was to unload DIRECTV and that may demand that they get AT&T out of the picture one way or the other.

 

[nelson61]

And maybe pigs can fly.