Bloomberg: AT&T in Advanced Talks to Buy DirecTV for $50 Billion

Monday, 12 May 2014 05:11 PM

 

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AT&T Inc. is in advanced talks to acquire DirecTV, the largest U.S. satellite-TV provider, for about $100 per share, according to people familiar with the matter.

Under the plan being discussed, DirecTV management will continue to run the company as a unit of AT&T and DirecTV Chief Executive Officer Mike White plans to retire after 2015, said the people, asking not to be named because the information is private.

The $100 per share price values El Segundo, California-based DirecTV at about $50 billion. That’s about 29 percent above DirecTV’s price on April 30, before initial reports of the talks. DirecTV rose 6 percent to $92.50 as of 5:15 p.m. in New York, after closing regular trading at $87.16 a share earlier today.

The purchase would give AT&T a satellite-TV provider to combine with its phone and broadband Internet offerings as competition ramps up. A deal could allow AT&T to offer U.S. subscribers a bundle of wireless, television, phone and high- speed broadband services.

DirecTV and AT&T are planning on a 12-month regulatory process to review the deal, one of the people said.

AT&T would acquire a pay-TV business that grew last year with expansion in Latin America and higher monthly bills for customers. DirecTV’s exclusive content includes the National Football League Sunday Ticket package, and products such as Genie, a multiroom DVR.

Ergen’s Interest

Comcast Corp.’s plan to acquire Time Warner Cable Inc. — to create an even bigger provider of both TV and Internet in the U.S. — is accelerating the drive for consolidation in the rest of the industry.

DirecTV had also drawn merger interest from Dish Network Corp. Chairman Charlie Ergen, people with knowledge of the matter said in March. While a DirecTV merger is tempting, the satellite-TV rival is too expensive to pursue, Ergen said last week on a conference call to discuss first-quarter earnings.

Dish doesn’t have “the kind of money” to outbid AT&T for DirecTV, Ergen said.

A merger between AT&T and DirecTV would make more sense strategically than financially and would leave Dish in a good position, Ergen said.

Darris Gringeri, a DirecTV spokesman, declined to comment as did Brad Burns, an AT&T spokesman. The Wall Street Journal reported earlier Monday that AT&T is planning a stock and cash bid for DirecTV, without specifying the price.

© Copyright 2014 Bloomberg News. All rights reserved.

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