Photographer: Patrick T. Fallon / Bloomberg
Photographer: Patrick T. Fallon / Bloomberg
AT&T Inc. holds exclusive talks to sell significant stake in DirecTV to private equity firm TPG, the latest stage in a months-long effort to unload at least some of the difficult pay-TV business, according to someone familiar with the matter .
A potential deal is within weeks, and talks could still disintegrate, said the person, who asked not to be identified because the deliberations are private. The agreement being discussed is highly structured and would include preferred shares, depending on the person.
It is unclear what valuation would be assigned to DirecTV, but previous discussions have focused on approximately $ 15 billion – a fraction of the $ 48.5 billion that AT&T agreed to pay in 2014. The price including debt at the time was of $ 67.1 billion. Since then, the business has bled customers, hard hit by the cord cut that has shaken the pay-TV industry.
Representatives from AT&T and TPG declined to comment.
CEO John Stankey has been trying to clean up the house at AT&T, selling unprofitable assets and has used the proceeds to pay off his mountain of debt. If AT&T can unload a major stake in the satellite business, it could let the telecommunications giant withdraw DirecTV from its books while maintaining access to part of its cash flow. In 2019, activist investor Elliott Management urged AT&T to explore the divestment of DirecTV.
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A blank check company backed by Citigroup Inc. rain operator Michael Klein had previously expressed interest in a deal, Bloomberg reported last year, but those conversations stalled. Apollo Global Management Inc. he has also held discussions about a transaction.
DirecTV had opened a merger with rival Dish Network Corp., people familiar with the matter said in 2019. But such an agreement would raise antitrust issues. A proposal to combine the two satellite services was overturned by the Federal Communications Commission and the Department of Justice in 2002.
As part of its belt-tightening efforts, AT&T agreed last month to sell its anime video unit to Crunchyroll Sony Corp. Funimation Global Group for $ 1.18 billion.
Reuters previously reported exclusive AT&T talks with TPG.
(Updates with company responses to the fourth paragraph.)