AT&T is in talks to sell a high minority-stake in DirecTV, as well as in AT&T Now and U-Verse, CNBC reported. The company is in discussions with a number of private equity firms, including Apollo Management, after starting a new round of bids last month. A deal would not include DirecTV’s Latin American business, sources said.
Under the terms of the proposed transaction, AT&T would remain the main shareholder and keep its ownership of the U-verse infrastructure, including plants and fibre. The buyer would control the pay-TV distribution operations and consolidate the business on its books. The deal could include 30-49 percent of the combined pay-TV distribution businesses, sources familiar with the matter said. The final bids are due in early December, they added.
The value of DirecTV is estimated at under USD 15 billion. AT&T bought the operations five years ago for USD 67 billion, including debt.
AT&T has been under pressure from investors, including activist shareholder Elliott Management to divest assets after acquiring DirecTV and then spending more than USD 100 billion on Time Warner. The proposed deal structure would give the carrier cash to pay down debt while keeping the equity check low enough for a fund, such as Apollo, to execute the deal itself, some of the sources noted.
