One oft-rumoured deal that hasn’t happened yet: AT&T buying satellite TV provider Dish Network. And now the deal looks more unlikely. AT&T has demanded that Dish repay a $500 million convertible note, which it could have turned into Dish (DISH) shares at $60.25, according to a SEC filing. (Shares are down 5.2% today to $31.30.)
What does this mean? Well, AT&T (T) certainly doesn’t need the cash. So the move is probably bad news for Dish, Goldman analyst Ingrid Chung notes today. Why? Chung:
- The move could throw Dish management “off balance” and may cause them to “question the strength of their relationship with AT&T”
- It might push Dish to give AT&T better terms on their satellite TV reselling agreement so AT&T doesn’t make an exclusive deal with rival DirecTV (DTV) when Dish’s deal expires this fall
- It could mean that AT&T doesn’t want to buy Dish, after all.
An alternate point of view: AT&T might just be trying to push Dish shares lower so they can buy them for cheaper. If true, that’s working so far.
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