Exclusive: buyout company TPG tops for stake in AT & T’s DirecTV – sources

(Reuters) – Private equity firm TPG has entered into exclusive negotiations to acquire a minority stake in AT&T Inc’s satellite TV division DirecTV in a deal that would allow the operator US mobile phone company to reduce its net debt by nearly $ 150 billion, people familiar with the matter said Friday.

The exact price TPG is willing to pay could not be learned, but sources said the deal could value DirecTV at over $ 15 billion. If negotiations are successful, a deal could be announced in the coming weeks, added the sources, who requested anonymity as the matter is confidential.

AT&T and TPG declined to comment.

AT&T shares rose nearly 1% on the news to an intraday high of $ 29.05, giving the company a market cap of nearly $ 210 billion. Shares unofficially closed on Friday at $ 28.92, up 0.3%.

The advanced negotiations with TPG are the culmination of an auction that AT&T conducted for DirecTV for several months. The deal would crystallize a financial blow to AT&T, which valued DirecTV at around $ 67 billion, including debt, when it agreed to acquire it in 2014.

Since then, DirecTV has bled subscribers, with users switching to less expensive online streaming services such as Netflix Inc and Amazon.com Inc.’s Prime service.

AT&T said it lost 590,000 subscribers in the third quarter on its DirecTV, U-verse and AT&T TV platforms. It is under pressure to reduce its growing debt as it invests more in 5G and other wireless services.

AT & T’s biggest deal, its $ 85 billion acquisition of media conglomerate Time Warner in 2018, has deteriorated in the wake of the COVID-19 pandemic as a drop in movie theater attendance weighs on its film revenues.

WarnerMedia, the segment that contains HBO and the company’s film and television studio, generated $ 7.5 billion in revenue in the third quarter of 2020, up from $ 8.4 billion in the last year’s quarter. .

However, thanks to more people looking for home entertainment, AT&T reported 38 million US subscribers for its premium TV channel HBO and HBO Max in the third quarter, hitting its 2021 target a year earlier. .

TPG, which had previously invested in companies in the sector such as the regional U.S. cable TV operator Astound and Spain’s Univision television channel, has around $ 85 billion in assets under management, according to its website.