Thursday - Jun 22, 2017

AT&T still talking to DirecTV bid, with a takeover bid of around $50 billion reportedly in the offing


AT&T still talking to DirecTV bid

The massive American multinational telecommunications corporation AT&T, is reportedly in advanced stages of negotiations with DirecTV, the largest satellite-television provider in the United States.

The two companies, according to industry speculation, are on the verge of signing a major deal, expected to be worth in the region of $50 billion, that would combine to make for one of the largest forces in the rapidly developing pay-per-view TV market.

DirecTV is estimated to have a current market value of around $44 billion, however AT&T is reportedly more interested in signing up for a combined cash and stock bid for the company, that would place a value on their shares of between $92 and $95 per share, making for a premium of around $5 billion to pick up the company.

Onlookers expect that the acquisition is still a few weeks off into the future, with one of the probable stumbling blocks being the proposed structure of the combined companies management, which is reportedly still under discussion.

If and when an agreement is reached, the proposed takeover would then have to face another major barrier, this time to convince government regulators to allow yet another major consolidation in the pay-TV segment.

Lawyers acting on behalf of Comcast, the largest cable company in the United States, has been tied up in the courtrooms for some time as they attempt to gain regulatory approval for their $42 billion proposed takeover for Time Warner Cable, until then their closest cable rival.

In the event that AT&T the second-largest domestic pay-TV business after Comcast, succeeds in their attempt to acquire DirecTV, it would more than triple current customer base of 6 million to 26 million, but also provide AT&T with the opportunity to transfer its video content from the U-verse network on to DirecTV’s satellites, dramatically increasing broadband speeds for their existing client base.

According to an industry onlooker, AT&T’s existing broadband and wireless infrastructure will go a long way in helping traditional satellite -based telecommunications companies to deliver the content through broadband, a service which the American consumer is increasingly demanding.

On speculation that the takeover is closer than ever, shares in DirecTV shares have risen considerably reaching $92.50 and reportedly still on the increase.

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