EchoStar stock plunged 13% Tuesday on the news that bondholders of subsidiary Dish Network rejected a proposed debt deal seen as key to sealing a merger with satellite rival DirecTV. Shares fell to $22.

A group of Dish bondholders on Monday rejected the proposed debt-exchange offer from DirecTV that was contingent upon them accepting a "haircut" of $1.5 billion. "A successful exchange was a condition for acquiring the Dish video business," a DirecTV spokesperson told Reuters in an emailed statement.

DirecTV said it will abandon a plan to buy its satellite television rival after some bondholders refused to accept a steep discount on Dish parent EchoStar’s debt.