Reports: AT&T looking to announce DirecTV deal within days


Bloomberg reports AT&T (T) aims to announce a DirecTV (DTV) deal by Monday. BuzzFeed reports AT&T is on track to make an announcement by Sunday. "The deal is done," says a source.

Past reports put the deal's price around $50B; DirecTV closed with a market cap of $44B on Friday. The company also has a $20.8B debt load that needs to be accounted for, partly offset by $3B in cash and $2B in investments.

Buying DirecTV would give AT&T 20.3M U.S. subs and 11.9M Latin American subs, plus a 41% stake in Mexican satellite TV provider Sky Mexico (6.1M subs) and access to the NFL's Sunday Ticket package.

Though not cheap, the deal might make it easier for AT&T to keep supporting its hefty dividend (current yield of 5%). Oppenheimer thinks a 50/50 cash/stock deal at $100/share would lead AT&T to pay out only 55% of its 2016 free cash flow through dividends vs. 65% otherwise.

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Comments (30)
  • harris2
    , contributor
    Comments (229) | Send Message
     
    I did not want T to invest in Europe. But now, at this price, I don't see the reward here either. I hope I am missing something.
    17 May 2014, 09:46 PM Reply Like
  • maybenot
    , contributor
    Comments (5987) | Send Message
     
    I have no idea if T is getting a good bargain buy or not.
    Maybe it's just a "meh buy."

     

    But, as a holder of T I am glad they will be buying DirecTV for the value it brings to them.
    17 May 2014, 09:54 PM Reply Like
  • Tradevestor
    , contributor
    Comments (4517) | Send Message
     
    Same here maybenot. Probably we will get hammered next week but then I'll buy more if it drops big.
    17 May 2014, 10:01 PM Reply Like
  • oilman545
    , contributor
    Comments (64) | Send Message
     
    This M&A idea has been in the news for at least a couple of days and the stock shows no adverse affects yet. I wonder if the Street will think of this in a positive way. The dividend is still safe so hold on.
    17 May 2014, 10:06 PM Reply Like
  • maybenot
    , contributor
    Comments (5987) | Send Message
     
    Trade -- hmmmm...had not thought about that...not sure why not...just hadn't.

     

    Yeah, it is something to look for. And it will be interesting to see what the various analysts will think of the buy and the value it brings to T.
    17 May 2014, 10:07 PM Reply Like
  • Tradevestor
    , contributor
    Comments (4517) | Send Message
     
    Deal is a bit higher than initially reported I think.
    17 May 2014, 10:08 PM Reply Like
  • romilar
    , contributor
    Comments (752) | Send Message
     
    I think I'll be as ready as I can to add shares if there is a deep pull-back. As far as T needing support for their div, I don't think so. I notice with this "deal" comes a considerable number of subscribers in and outside the US.

     

    maybenot - I hope the analysts rain all over this. I would love to see a 15-20% fall in share price based on hollow head news and in my own small way, I will be instrumental in driving the price up....Rom
    17 May 2014, 11:58 PM Reply Like
  • dostoevsky228
    , contributor
    Comments (307) | Send Message
     
    Long time T holder. I have referential dislike for the 4.3 billion $$$ CEO fraud Stephenson. I have not heard any analyst (so far) who has been positive about this seemingly now done deal. The most erudite assessment that i heard was, "First, T-Mobile, then Dish; then Vodaphone; now DirecTV. this is no way to build a company."

     

    Lowell McAdam is a real CEO, who knows how to make a deal that benefits shareholders, that being Verizon too which, heavyweights such as Warren Buffet are on board now.

     

    Remember 5-6 years ago, T & VZ were BOTH in the mid 20's. Today, VZ at $49+ and T is 36+.....i see the stock plummeting on Monday, whenever the fraud Stephenson speaks.
    17 May 2014, 10:16 PM Reply Like
  • Tradevestor
    , contributor
    Comments (4517) | Send Message
     
    It might not actually plummet but a pull back is likely.

     

    However, the report also says this might make it easier for T to pay dividends. This might push the stock up too.
    17 May 2014, 10:18 PM Reply Like
  • IncomeYield
    , contributor
    Comments (3215) | Send Message
     
    It could have been worse, it could have been Beats :)
    18 May 2014, 11:01 PM Reply Like
  • SUCKMEISTER
    , contributor
    Comments (67) | Send Message
     
    Will I be able to make telephone calls directly from my t.v. now?
    17 May 2014, 10:17 PM Reply Like
  • Tradevestor
    , contributor
    Comments (4517) | Send Message
     
    http://on.mktw.net/RLt3al
    17 May 2014, 10:19 PM Reply Like
  • maybenot
    , contributor
    Comments (5987) | Send Message
     
    Thanks for the link. Interesting views & thoughts. We shall see.
    18 May 2014, 12:07 AM Reply Like
  • Tradevestor
    , contributor
    Comments (4517) | Send Message
     
    Check this one out too http://seekingalpha.co...
    18 May 2014, 02:12 PM Reply Like
  • arthur_bishop1972
    , contributor
    Comments (3766) | Send Message
     
    T pps has held up so far. Hard to believe that biggest investors wouldnt have started selling already had they hated the deal. Their brokers must have run the #s and told them its solid.
    17 May 2014, 10:21 PM Reply Like
  • Magnut
    , contributor
    Comments (110) | Send Message
     
    I think T will be ok. They are a Pig of a company. They can afford it .Iterest rates are low. They will have more customers to sell services to and added cash flow. I liked the VZ buyout of Vodaphone better. We will see... Long T and VZ
    17 May 2014, 10:31 PM Reply Like
  • FinFreedom
    , contributor
    Comments (21) | Send Message
     
    Satellite and cable companies are losing customers. Subscription prices on tv, phone, wireless services in Latin America are controlled by the government. In my opinion T overpays, the deal is bad. But top officers in both corp will make a lottttt of $$$$
    18 May 2014, 01:46 AM Reply Like
  • arthur_bishop1972
    , contributor
    Comments (3766) | Send Message
     
    I didn't realize (til earlier today, anyway) that WB was a large shareholder in DTV. Man oh man...another huge payout for Warren.
    18 May 2014, 02:36 AM Reply Like
  • ajb59us
    , contributor
    Comments (19) | Send Message
     
    I'm a dtv shareholder and I'm loving what I'm hearing.
    18 May 2014, 03:32 AM Reply Like
  • ajb59us
    , contributor
    Comments (19) | Send Message
     
    I'm a dtv shareholder and I'm loving what I'm hearing.
    18 May 2014, 03:32 AM Reply Like
  • ajb59us
    , contributor
    Comments (19) | Send Message
     
    I'm a dtv shareholder and I'm loving what I'm hearing.
    18 May 2014, 03:32 AM Reply Like
  • baker boy
    , contributor
    Comment (1) | Send Message
     
    This wil be a good deal for T owners
    18 May 2014, 03:33 AM Reply Like
  • maxbelski
    , contributor
    Comments (57) | Send Message
     
    I agree. I do not own T, but I do own DTV. Is it strange that warren buffet bought VZ, while he has a truckload of DTV as well. I think at the end he will own both VZ and T for a while.
    18 May 2014, 09:54 AM Reply Like
  • Patent News
    , contributor
    Comments (1458) | Send Message
     
    not a good deal for T for a while but good for DTV holders...
    18 May 2014, 10:12 AM Reply Like
  • Matthew Davis
    , contributor
    Comments (4709) | Send Message
     
    Watch AT&T can't help themselves and really jack up rates on DTV services...and run the company into the ground, thus increasing Uverse prices as well.

     

    Good luck to you all.
    18 May 2014, 10:29 AM Reply Like
  • maybenot
    , contributor
    Comments (5987) | Send Message
     
    Yeah, probably. Just the usual of what happens.

     

    Thus, long T.
    18 May 2014, 12:33 PM Reply Like
  • joeg1969
    , contributor
    Comments (440) | Send Message
     
    Expecting $GOGO to be next see you all at $30!
    18 May 2014, 01:13 PM Reply Like
  • maxbelski
    , contributor
    Comments (57) | Send Message
     
    any proof? or you just talking?
    18 May 2014, 02:15 PM Reply Like
  • U2A Ventures
    , contributor
    Comments (297) | Send Message
     
    "Berkshire still owns 34.5 million shares of DirecTV, which were valued at $2.6 billion at the end of the first quarter." http://on.wsj.com/1hVBQgx

     

    Getting Paid $$$$
    18 May 2014, 01:14 PM Reply Like
  • Tradevestor
    , contributor
    Comments (4517) | Send Message
     
    And here is a look at how things might be for AT&T shareholders http://seekingalpha.co...
    18 May 2014, 02:12 PM Reply Like
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