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Thread: Wall Street Journal: AT&T Has Approached DirecTV About Possible Acquisition

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    Wall Street Journal: AT&T Has Approached DirecTV About Possible Acquisition

    http://online.wsj.com/news/articles/...724368360.html


    AT&T T has approached DirecTV about a possible acquisition of the satellite TV firm, say people familiar with the situation, the latest sign of a possible shakeup in the television industry.

    A combination of AT&T with satellite TV firm DirecTV would create a pay television giant close in size to where Comcast Corp will be if it completes its pending acquisition of Time Warner Cable.

    DirecTV is the second biggest pay TV operator, serving about 20 million customers, while AT&T's landline-based TV business serves about 5.7 million. The nearly 26 million subscribers served by the combined company would compare with Comcast which—with TWC—would serve close to 30 million subscribers.

    A deal would likely be worth at least $40 billion, DirecTV's current market capitalization, a fraction of AT&T's $185 billion market capitalization.

    AT&T declined to comment. DirecTV declined to comment

    The approach has come since Comcast struck its Time Warner Cable deal in February, one of the people said. It is unclear whether the companies are in detailed talks, but another person familiar with the situation said that DirecTV would be open to a deal. The satellite TV industry is facing a slowdown in subscriber growth after years of adding customers. The pay television market in the U.S. is now mature, with about 90% of U.S. households with TV now subscribing to either cable, satellite or phone company-delivered television.

    And satellite firms' inability to offer Internet access that is competitive with cable and phone companies is becoming a bigger issue.

    Since 2010, DirecTV's rate of subscriber growth in the U.S. has fallen every year, compared with the prior year. Last year, DirecTV lost subscribers in a quarter for the second time ever, in a deeper loss from the year-ago quarter when it saw its first such loss, according to MoffettNathanson LLC data.

    Acquisition of DirecTV would give AT&T a national footprint in pay television at a time when the telecom company sees video delivery as core to its future. An acquisition would allow AT&T to offer bundles of wireless and TV services, and could give AT&T new ways to deliver video to its mobile and broadband customers.

    AT&T's interest in owning a satellite television provider has been speculated about for years. The telecom carrier has held talks with both Dish Network Corp. and DirecTV in recent years, according to people close to the situation.

    AT&T already has a partnership with DirecTV to sell its service in areas where it offers broadband but doesn't offer its U-verse television service.

    AT&T, which has grown rapidly from a regional telecommunications firm into one of the U.S. industry's two largest companies via an aggressive merger strategy, had been expected to make its next move into Europe. But Chief Executive Randall Stephenson said at an investor conference earlier this year that Comcast's proposed purchase of Time Warner Cable has shifted his priorities, leading him to refocus on the U.S.

    "It's an industry redefining deal from our standpoint," Mr. Stephenson said.

    Whether regulators would agree to a DirecTV-AT&T merger is a major question. Comcast's Time Warner Cable deal faces tough regulatory scrutiny and a second pay TV merger would likely intensify regulatory and political questions surrounding consolidation in the industry.

    Despite DirecTV's recent slowdowns, satellite investors point out that it has continued to outperform its cable rivals. And part of the drop-off in subscriber growth is due to the company's strategic focus on adding only higher-value customers who are less likely to chase discounts and switch providers. One investor called the company's results "outstanding" both "operationally and in terms of share appreciation" thanks to big stock buybacks. But the investor noted that built into the value of DirecTV's shares is some anticipation of the company being acquired in the future.

    DirecTV and its satellite rival Dish Network Corp. attempted a merger more than a decade ago which was blocked by regulators. Dish has lately approached DirecTV about trying again, say people familiar with the situation, although that approach hasn't led to any discussions. While executives from both companies have publicly signaled their continuing interest in the idea, they have also noted that the two companies have taken different strategic routes, and regulatory attitudes to a merger remain unclear.

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    This will be the year of major consolidation apparently if the government allows it.


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    If this deal goes through, I wonder what Verizon will do, since they have a partnership with DirecTV in places where they don't offer FiOS TV. Imagine Verizon having to pay AT&T for TV service. lol.
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    Quote Originally Posted by terryjohnson16 View Post
    If this deal goes through, I wonder what Verizon will do, since they have a partnership with DirecTV in places where they don't offer FiOS TV. Imagine Verizon having to pay AT&T for TV service. lol.
    Very big if. But I'd go ahead and say that the deal would quickly come to an end. I'm sure they would further branch out with Comcast (with whom they have a partnership) before giving more business to AT&T.


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    Great! Even more consolidation! And at a time when Net Neutrality is gone. If the Internet gets worse then I guess that'll give me more time to read some books and get outside and enjoy the outdoors

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    Quote Originally Posted by terryjohnson16 View Post
    If this deal goes through, I wonder what Verizon will do, since they have a partnership with DirecTV in places where they don't offer FiOS TV. Imagine Verizon having to pay AT&T for TV service. lol.
    That would put Dish Network up for play.

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    Quote Originally Posted by Danny4G View Post
    That would put Dish Network up for play.
    According to an article published in the Dallas Morning News (http://www.dallasnews.com/business/h...e-triangle.ece), "Dish, in addition to satellite TV, has built up a portfolio of wireless airwave licenses worth almost $26 billion that could help AT&T expand its capacity".
    Last edited by nyctechogirl; 05-04-2014 at 10:31 PM. Reason: Added word

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    Quote Originally Posted by nyctechogirl View Post
    According to an article published in the Dallas Morning News (http://www.dallasnews.com/business/h...e-triangle.ece), "Dish, in addition to satellite TV, has built up a portfolio of wireless airwave licenses worth almost $26 billion that could help AT&T expand its capacity".
    There's obviously some kind of error in that figure. The entire DISH Network Corporation is currently valued at about 28.3B. The only wireless licenses they have that are worth anything is the PCS H-block (1.5B) and the LSMH E-block (appr. 1B). So perhaps they meant to say their wireless licenses are worth 2.6B, that I could believe. And yes, the LSMH E-block would be a great fit for AT&T to augment their LSMH D-block licenses.

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    Quote Originally Posted by gpatrick900
    I am a little confused. My Verizon phone was able to roam on GSM because they used TDMA. Tell it was shutdown. The phone recognizes it as Analog. If PCS has TDMA, It could be technically be used on GSM.
    Quote Originally Posted by Tabla View Post
    Y'know, I'm used to hysterical 14-year-old ******** on the internet, but this is exceptional. Never before in human history have so many nerds hyperventilated so publicly over so little.

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    http://online.wsj.com/news/articles/...578579216.html


    DirecTV is working with advisers including Goldman Sachs Group Inc. to evaluate a possible combination with AT&T Inc. people familiar with the matter said, a sign the satellite broadcaster is seriously considering a deal with the telecom company.

    The two companies are in talks following an approach from AT&T to acquire DirecTV, people familiar with the matter said. A deal would create a pay television company that would serve more than 25 million subscribers and rival a combined Comcast Corp. and Time Warner Cable Inc.

    On a conference call with analysts Tuesday, DirecTV Chief Executive Mike White noted recent media reports speculating "about possible transactions that might involve DirecTV." He said the reports weren't "based on official sources of information and we don't view it as productive to speculate about alternative business combinations which may or may not occur." He said he wouldn't comment further or take questions on the reports.

    DirecTV stock, which had fluctuated last week after The Wall Street Journal reported the approach by AT&T, has rallied in the past two days. On Wednesday it was trading up 3%, having risen 2.4% on Tuesday. At its current price of a little more than $84 a share, DirecTV has a market capitalization of about $43 billion.

    Mr. White and AT&T executives have each said previously that Comcast's $45 billion deal to acquire Time Warner Cable has changed the competitive landscape, and both companies have said they are looking at how to strengthen their positions.

    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.

    "The deal would provide financial and operational synergies that appear to fit AT&T's historic game plan," Mr. Hodulik wrote.

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    This is a good fit, and one I wouldn't mind getting approved.

    All of a sudden, AT&T leadership is outflanking Verizon at every turn. It's like they were waiting for a specific date to show their true skill set!?


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    AT&T May Reach Deal for DirecTV in Two Weeks, Says WSJ

    http://blogs.barrons.com/techtraderd...eeks-says-wsj/


    Shares of AT&T rose today while those of DirecTV closed lower, as rumors swirled of a possible buyout of the latter by AT&T.

    The Wall Street Journal this afternoon is reporting that the two “could strike a deal in as soon as two weeks,” citing unnamed sources.

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    Quote Originally Posted by Wide_opeN View Post
    This is a good fit, and one I wouldn't mind getting approved.

    All of a sudden, AT&T leadership is outflanking Verizon at every turn. It's like they were waiting for a specific date to show their true skill set!?


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    Indeed. I know AT&T is working on a Netflix-esque type of service/competitor that we'll be able to stream from home or from our tablets/smartphones and soon our cars. I'm sure this has some play in this deal besides allowing AT&T to broadcast media to all areas of North or South America where DirectTV's satellites currently reach and AT&T as LEC doesn't.

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    [h=AT&T & DirecTV Reportedly Near $50 Billion Deal To Put Sate]1[/h]


    The Wall Street Journal reports that an engagement between these two lovestruck companies could happen within the next two weeks, while Bloomberg adds that DirecTV would continue operating under its established brand as a unit of AT&T
    http://consumerist.com/2014/05/12/at...on-death-star/

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    I like how proactive att is lately. Much different than a few years ago

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    Let's see if verizon tries to go after dish. The FCC and DoJ has a lot of stuff to sit down and discuss.


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