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Photographer: Patrick T. Fallon / Bloomberg
Photographer: Patrick T. Fallon / Bloomberg
AT&T Inc. is in exclusive talks to sell a large stake in DirecTV to private equity firm TPG, the latest step in a months-long effort to offload at least some of the struggling pay-TV business, according to someone familiar with the subject.
A potential deal is weeks away and talks could still crumble, said the person, who asked not to be identified because deliberations are private. The deal under discussion is very structured and would include preferred stock, depending on the person.
It’s unclear what rating DirecTV would be given, but previous discussions have focused on around $ 15 billion – a fraction of the $ 48.5 billion AT&T agreed to pay in 2014. The price, debt included, was then $ 67.1 billion. Since then, the company has had customers with hemorrhages, hit hard by the cut in the cord that rocked the pay television industry.
Representatives for AT&T and TPG declined to comment.
CEO John Stankey tried to clean up the house at AT&T, selling underperforming assets and using the proceeds to pay off his mountain of debt. If AT&T can offload a major stake in the satellite business, it could let the telecommunications giant take DirecTV off its books while retaining access to some of its cash flow. In 2019, activist investor Elliott Management urged AT&T to explore an divestiture of DirecTV.
Read more: AT&T’s second breakup
A blank check company backed by former rain maker Citigroup Inc. Michael Klein has previously expressed interest in a deal, Bloomberg reported last year, but those talks have stalled. Apollo Global Management Inc. has also held talks about a transaction.
DirecTV had been open to a merger with rival Dish Network Corp., people familiar with the matter said in 2019. But such a deal would raise antitrust questions. A proposal to combine the two satellite services was shot down by the Federal Communications Commission and the Ministry of Justice in 2002.
As part of its belt tightening efforts, AT&T agreed last month to sell its Crunchyroll anime video unit to Funimation Global Group of Sony Corp. for $ 1.18 billion.
Reuters previously reported on AT & T’s exclusive discussions with TPG.
(Updates with company responses to the fourth paragraph.)
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