EchoStar Stock Dives On DirecTV, Dish Deal: The Details

EchoStar Corp SATS shares are trading lower. The company on Monday announced that DirecTV will acquire its video distribution business.

What Happened: EchoStar and DirecTV entered into a definitive agreement in which DirecTV will acquire EchoStar’s video distribution business, including DISH TV and Sling TV, through a debt exchange transaction.

“This agreement is in the best interests of EchoStar’s customers, shareholders, bondholders, employees, and partners,” said Hamid Akhavan, president and CEO of EchoStar.

“With an improved financial profile, we will be better positioned to continue enhancing and deploying our nationwide 5G Open RAN wireless network. This will provide U.S. wireless consumers with more choices and help to drive innovation at a faster pace. We expect DISH and EchoStar bondholders to benefit from two companies with stronger financial profiles and more sustainable capital structures.”

Under terms of the agreement, DirecTV will acquire EchoStar’s video business for a nominal consideration of $1 plus the assumption of Dish DBS net debt. Dish and DirecTV have commenced an exchange offer for five different series of Dish DBS notes with a total face value of approximately $9.75 billion. The transaction is expected to close in the fourth quarter of 2025.

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The combined offerings are expected to give consumers more choice and better value. The combined video company is expected to allow programmers to deliver packages at lower prices, bring together multiple content sources in one place, have enhanced ability to invest to improve its services, and help realize efficiencies of shared infrastructure.

The transaction is also expected to benefit U.S. wireless consumers by allowing EchoStar to focus on enhancing and further deploying its 5G Open RAN cloud-native wireless network.

EchoStar also announced that TPG Angelo Gordon and certain co-investors have provided $2.5 billion of financing. All holders of Dish convertible notes will have the opportunity to exchange their notes for new secured notes and secured convertible notes of EchoStar maturing in 2030. 

In addition, certain members of the Dish supporting investors and a related party of chairman Charles Ergen have entered into a commitment agreement in which EchoStar will issue $5.1 billion of new senior secured notes maturing in 2029 for cash.

The $5.1 billion new money financing from the Supporting Investors will provide EchoStar with significant capital for the buildout of its Boost Mobile nationwide 5G Open RAN network. 

“With an improved financial profile and a unique approach, we expect to gain share, drive shareholder value, and provide more options for U.S. wireless consumers. Our collaboration with our existing stakeholders to achieve this holistic recapitalization solution at EchoStar is a testament to their continued support of our vision, and we greatly appreciate their partnership and continued investment in our mission,” Akhaven said.

SATS Price Action: EchoStar shares were down 15.2% at $23.84 at the time of publication Monday, per Benzinga Pro.

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