Photographer: Patrick T. Fallon / Bloomberg
Photographer: Patrick T. Fallon / Bloomberg
AT&T Inc. is in exclusive talks to sell a significant stake in DirecTV to private equity firm TPG, the latest one-month move to download at least part of its pay-TV business, according to someone familiar with the matter.
A potential agreement is in a few weeks, and talks could still fall apart, said the person who asked not to be identified, as the deliberations are private. The agreement discussed is very structured and would include preferred actions, according to that person.
It is unclear what rating would be given to DirecTV, but previous discussions focused on about $ 15 billion – a fraction of the $ 48.5 billion AT&T agreed to pay for it in 2014. The price, including debt for then, it was $ 67.1 billion. Since then, the business has bled customers, hit hard by the cable cuts that have shaken the pay-TV industry.
AT&T and TPG representatives declined to comment.
CEO John Stankey tried to clean up the house at AT&T, selling non-performing assets and using the proceeds to pay off his debt. If AT&T can unload a major stake in the satellite business, it could let the telecommunications giant remove DirecTV from its books, while maintaining access to some cash flow. In 2019, activist investor Elliott Management has asked AT&T to explore a divestment of DirecTV.
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A company with a blank check, backed by former Citigroup Inc. rain producer Michael Klein, has previously expressed interest in a deal, Bloomberg reported last year, but those talks stopped. Apollo Global Management Inc. he also had discussions about a transaction.
DirecTV was opened in a merger with rival Dish Network Corp., said in 2019 people familiar with the issue. But such an agreement would raise antitrust questions. A proposed combination of the two satellite services was brought down by the Federal Communications Commission and Department of Justice in 2002.
As part of its belt-tightening efforts, AT&T agreed last month to sell its anime video unit Crunchyroll Funimation Global Group of Sony Corp. for $ 1.18 billion.
Reuters previously reported on AT & T’s exclusive talks with TPG.
(Updates with responses from companies to the fourth paragraph.)