AT&T has started talks on selling its satellite TV business DirecTV, the Wall Street Journal reports. The company and its advisers at Goldman Sachs have been in talks with private-equity suitors, and potential bidders include Apollo Global Management and Platinum Equity, people familiar with the matter said.
The process is at an early stage, according to the report. Other investors that were approached have decided not to pursue bids, some of the people said.
The satellite business has been steadily losing customers since AT&T bought DirecTV in 2015, hurt by the cord-cutting trend in the US and shift to IP services. AT&T has been trying to refocus the pay-TV business on higher-margin services, phasing out promotions and pushing its newer streaming offers. A sale of the satellite business would be part of AT&T's efforts to divest assets in order to reduce debt.
AT&T executives have previously explored parting with DirecTV assets, including a potential spin-off or combining assets with rival Dish Network but obstacles, including antitrust concerns, have gotten in the way. A private-equity buyer could avoid those regulatory concerns. AT&T is looking to sell just over 50 percent of the asset, which would allow the company to take the business off its books while still enjoying the benefits of a large distribution network, some of the people said.
The satellite TV service is likely to be valued at much less than the USD 49 billion AT&T paid for it in 2015. The WSJ's sources said it would sell for less than USD 20 billion.
