AT&T may announce the sale of a minority stake (the largest stake) of its companies DirecTV, AT&T TV Now and U-Verse for $ 15 billion to private equity firm TPG this week, media reported.
AT&T (T) is in advanced negotiations with private equity firm TPG to sell a minority stake (the largest stake) in its satellite and cable TV companies DirecTV, AT&T TV Now and U-Verse for approximately $ 15 billion, with AT&T retaining some of them, CNBC reported, citing anonymous sources.
The deal could reportedly be announced as early as this week.
Over the past few years, AT&T has been trying to move away from the satellite and cable TV business to focus on the development of HBO Max video streaming services. Marketinfo.pro wrote more about this in the article “AT&T Loses the Competition of Streaming Video Services”.
If the deal goes through, it will allow AT&T to cut underperforming assets and huge long-term debt, which totaled nearly $ 176 billion at the end of the fourth quarter.
AT&T acquired DirecTV in 2014 for a whopping $ 48.5 billion ($ 67 billion in debt) criticized by analysts. However, both DirecTV satellite TV services and U-Vers cable TV services have lost their relevance in the era of streaming services, the video content of which can be watched from different devices with the Internet.
Thus, in 2020, AT&T lost 4.1 million paid users of DirecTV, AT&T TV Now and U-Verse services. The company also wrote off $ 15.5 billion in impairment losses from the business.
AT&T’s major shareholder, hedge fund Elliott Management, has previously urged AT&T executives to focus on its high-growth strategic businesses and consider selling non-core assets, including DirecTV.
Market analysts indicated that AT&T had previously negotiated the sale of DirecTV with several companies, but the deal did not take place with any of them.
AT&T shares fell sharply in March 2020, after which they failed to recover by half, over the past 12 months, the decline was 23.3%.
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