AT&T is in talks with private-equity firms, including selling a “significant” minority stake in its paid-television businesses DirecTV, according to a report.
CNBC reported on Tuesday that several private equity firms, including Apollo Management, are asked to submit bids for the units, including the AT&T U-Word and AT&T Now businesses. Bids are scheduled to begin in early December.
CNBC said that although the valuation has not been determined, a deal could cost DRETV less than $ 15 billion. The Post reported last month that AT&T was offering a lower offer, “under $ 20 billion.” AT&T acquired DirecTV in 2015 for $ 67 billion, including debt. One deal would not include the entity’s Latin American business, the report noted.
As part of a possible deal, AT&T transferred inherited assets from AT & T’s balance sheet, citing anonymous sources, CNBC said.
The report stated that under the terms of the proposed deal, the telecom giants would retain majority ownership of the business, and the ownership of U-Versus Infrastructure. Additionally, the buyer will control the pay-TV distribution operations and consolidate the business on its books.
In recent months, AT&T has been trying to offload non-core assets to reduce its debt load of more than $ 150 billion, and is focusing on growing its streaming service, HBO Max.
DirecTV, which has been a hemorrhaging subscriber, topped AT & T’s list. AT&T ended the third quarter with about 17 million legacy TV subscribers (DirecTV and U-verse combined), up 16 percent from a year earlier. AT&T now fell 40 percent to 683,000 customers.
“AT&T is trying to work very hard,” said MoffettNathanson analyst Craig Moffett, adding that they would have to manage their portfolio of declining businesses by reducing their costs, while still hurting their cash production prospects very badly. Not delivering, while at the same time maintaining a way. Pay a dividend, enough debt to mortgage the rating agencies, and, all the while, invest in some of the growth areas they’ve got that qualify (wireless, HBO Max, and fiber-based broadband). “