AT&T in talks to buy DirecTV for nearly $50 billion: sources

Tue May 13, 2014 6:44am EDT
 
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By Soyoung Kim and Ronald Grover

NEW YORK/LOS ANGELES (Reuters) - AT&T Inc is in active talks to buy satellite TV provider DirecTV and may complete a deal in the next few weeks that could be worth close to $50 billion, two people familiar with the matter said on Monday.

The second-largest wireless operator is discussing an offer in the low- to mid-$90s per share for DirecTV, one of the people said, compared with the company's closing price of $87.16 on Monday.

A bid near $95 per share would value DirecTV at more than $48 billion based on its shares outstanding, and would represent a premium of more than 20 percent to its stock price before news of AT&T's interest first emerged on May 1.

The deal price has yet to be finalized and terms could still change, the people said, adding that discussions are continuing. They asked not to be named because the matter is not public.

Other details also have yet to be worked out, such as a break-up fee as well as a potential role for DirecTV Chief Executive Officer Mike White, the second person said.

The talks are the latest sign of a rising tide of potential megadeals in the telecoms, cable and satellite TV space, which is being roiled by Comcast Corp's proposed $45 billion takeover of Time Warner Cable Inc as well as market forces such as the rise of Web-based TV and surging mobile Internet usage.

AT&T and DirecTV declined to comment. Bloomberg News earlier reported that AT&T was offering to pay around $100 per share for DirecTV, whose management team will continue to run the company as a unit of AT&T. (link.reuters.com/xyf39v). The Wall Street Journal said a deal could happen in two weeks.

DirecTV shares rose 6 percent to $92.50 in extended trading on Monday.   Continued...

 
An AT&T sign is shown on a building in downtown San Diego, California March 18, 2014. REUTERS/Mike Blake