MediaPro Indian TV JV broken up

AT&T is in advanced talks to acquire satellite TV leader DirecTV in a deal worth $50 billion, according to published reports.

The telco hopes to clinch a deal to buy DirecTV — which has about 20 million U.S. subscribers — within two weeks, according to a report in the Wall Street Journal, which broke the story late last month that AT&T had approached DirecTV about an acquisition.

Under the proposed pact, DirecTV CEO Mike White and other top management would continue to run the satcaster as a unit of AT&T until White retires sometime after 2015, Bloomberg reported, citing anonymous sources.

The telco is offering about $100 per share for DirecTV, according to Bloomberg’s report. In a later update, Bloomberg said the price could actually come in “close to $95 a share.” Reuters reported AT&T was discussing an offer for the satcaster in the low- to mid-$90s per share. DirecTV shares closed at $87.16 per share Monday.

Reps for AT&T and DirecTV declined to comment on the reports.

A tie-up between AT&T and DirecTV has been speculated about for years. But the parties have a new impetus in joining forces to take on Comcast, whose $45 billion bid for Time Warner Cable would produce an entity serving about 30 million U.S. TV subscribers.

Analysts have speculated that AT&T could migrate its 5.7 million U-verse TV subscribers to DirecTV’s satellite-delivered service, freeing up bandwidth in its terrestrial data networks. With 26 million pay-TV subscribers, AT&T would also gain leverage in programming negotiations on par with a merged Comcast-TW Cable.

An AT&T bid for DirecTV would face close regulatory scrutiny, and the companies expect a 12-month-long review process, Bloomberg reported.

Dish Network chairman Charlie Ergen, speaking on the satcaster’s first-quarter earnings call last week, said “there certainly is economic rationale” for AT&T acquiring DirecTV because it would be an accretive transaction for the telco. He said Dish has “no shot” in outbidding AT&T for DirecTV, adding: “We don’t want to pay a value for something that’s purely financial, not strategic.”

Filed Under:

Follow @Variety on Twitter for breaking news, reviews and more
Post A Comment 5