DirecTV has called off its planned acquisition of Dish Network after failing to win over bondholders. The deal would have created one of the nation's largest pay TV distributors with a combined 20 million subscribers.
But it required Dish bondholders to agree to exchange their debt for new debt in the merged entity at a discounted rate, which would have created a loss of about $1.57 billion.
The collapse of the deal leaves Dish in a difficult positon. Dish carries substantial debt and will now have to explore refinancing options, asset sales, or other financial maneuvers to manage its obligations and avoid potential bankruptcy, analysts said.
Dish's core business is suffering It has a declining subscriber base due to competition from streaming services and will need to innovate its pay-TV offerings.
Perhaps fortunately, Dish has invested in building a nationwide 5G network and owns Boost Mobile, which gives it an opportunity to expand those services.
The collapse of the acquisition is not expected to have any immediate effect on customers of either company.