(Bloomberg) — Dish Network Corp. creditors plan to reject the US satellite-television provider’s revised bond-exchange offer, approval of which is needed for the company’s proposed acquisition by rival DirecTV to occur.
A group of steering committee investors don’t view the latest offer — which would lower the minimum losses on $8.9 billion of bonds by $70 million to $1.5 billion — as workable, according to people familiar with the matter who asked not to be named discussing private negotiations.
Bondholders have proposed a $300 million haircut and suggested there’s some flexibility beyond that, the people said. The acceptance deadline is Nov. 12, and as of Oct. 28 a small minority of notes had been tendered in support of the exchange offer.
Since it was announced on Sept. 30 that TPG Inc. would buy the rest of DirecTV it didn’t own and then acquire Dish Network for $1 dollar plus debt assumption, the pay-TV providers have battled with holders of unit Dish DBS Corp.’s bonds. Letters exchanged between representation for bondholders and lawyers for DirecTV have demonstrated a stalemate.
A group of bondholders 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 DirecTV rejected earlier offers from bondholders and threatened to walk away from buying Dish Network, Bloomberg reported.
Ropes & Gray, serving as DirecTV’s legal counsel, TPG and DirecTV did not respond to requests for comment. Milbank, representing the creditor group, did not respond to requests for comment while a representative for Lazard, also advising creditors, declined to comment. A representative for Houlihan Lokey Inc. declined to comment while fellow Dish adviser White & Case did not respond.
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