DirecTV Is In Play

Fasten your seat belts, DirecTV ($DTV) is in play.

Reuters:

DirecTV working with advisers on possible AT&T merger

DirecTV is working with advisers including Goldman Sachs to weigh a possible merger with AT&T , according to Dow Jones, which cited sources.

The two companies have been in talks since AT&T approached the satellite TV company about a deal, the sources said.

If you squint real hard, you can just barely make up when the story broke.

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If you can’t see it, the news broke about 10 minutes before the close.

Update: The WSJ has more.

A deal for DirecTV would bolster AT&T’s ability to distribute movies and television shows at a time when it increasingly sees video as central to its future. The telecom company is pursuing a dual approach, expanding its U-verse pay TV service while also building so-called over-the-top services to deliver video content over broadband and wireless connections.

The combined company would have annual revenue of about $160 billion and may be better positioned to negotiate for the needed rights to TV shows and movies.

In addition, a deal for DirecTV could deliver significant financial benefits for AT&T at a time when Wall Street is concerned about the amount of cash needed to fund AT&T’s dividend. UBS analyst John Hodulik said in a recent research note that the deal would provide AT&T the free cash flow needed to pay its dividend for the next decade.

Posted by on May 7th, 2014 at 5:02 pm


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