Dish Network's attempt to merge with DirecTV has encountered a major obstacle, as creditors have deemed the current terms unfeasible.

A letter obtained by Bloomberg reveals that bondholders, who hold around $8.9 billion in Dish notes, have expressed their dissatisfaction with a proposal that would require them to absorb losses of nearly $1.6 billion.

DirecTV has rejected a counteroffer from this group, which sought adjustments to a debt exchange that is crucial for the completion of the merger.

The bondholders have indicated that DirecTV now has three options: continue negotiations, proceed with the acquisition as it stands while incurring additional costs, or face ongoing litigation.