39% Annualized Return And AT&T
Chris DeMuth Jr. • 175 Comments
Chris DeMuth Jr. • 175 Comments
Going Long Leap Wireless: More Than A Leap Of Faith
Helix Investment Research
Helix Investment Research
Tue, Jun. 14, 2:21 PM
- Following second-round bids, AT&T (T +0.3%), Verizon (VZ +0.4%), P-E firm TPG, and a group led by Quicken Loans founder/Cleveland Cavaliers owner Dan Gilbert remain in the running to buy Yahoo's (YHOO +2.2%) core assets, a source tells Fortune's Dan Primack. A joint bid from P-E firms Bain and Vista Equity reportedly didn't make the cut.
- "Price talk" is said to be in the $4B-$5B range. "I think AT&T is just trying to drive the price up on Verizon," Primack also reports hearing from a source.
- Bloomberg reported last week AT&T and Gilbert each bid ~$5B for Yahoo's core business, patents, and real estate. Re/code reported Verizon bid ~$3B-$3.5B for just the core business.
- Yahoo is trading higher, but that's the result of Alibaba (up 3.1%) rallying after providing a strong sales forecast.
Fri, Jun. 10, 4:08 PM
- Bloomberg reports AT&T (T +0.6%) and a group led by Quicken Loans founder/Cleveland Cavaliers owner Dan Gilbert (backed by Warren Buffett) each submitted a ~$5B second-round bid for Yahoo's (YHOO -1.4%) core business, patents, and real estate.
- Separately, a day after CNBC reported Verizon (VZ +1.4%) made a ~$3.5B second-round bid, Re/code reports Big Red made an offer valued between $3B and $3.5B, depending on "how employee compensation commitments are treated." However, Verizon's bid excludes Yahoo's patents and real estate.
- When adjusted for the absence of patents/real estate, Verizon's bid might be competitive with the others. Re/code observes Yahoo respectively values its patents and real estate at $3B and $1B, while adding others assign much lower values to each (~$1B for the patents).
- Yahoo slipped today amid a 2.1% drop for Alibaba, and a 1.3% drop for the Nasdaq.
Wed, May 25, 11:12 AM
- In a surprise revelation, AT&T (NYSE:T) made a bid for Yahoo (YHOO -2.1%) and is still in the running for the core Internet business, Bloomberg reports.
- They were out of the offing according to earlier reports. But they kept involved in the process through a stake in YP Holdings -- which was involved in the early round in April -- and while YP isn't pursuing the transaction any longer, AT&T is still around.
- The interest from the telecom giant would present a formidable challenge for presumed frontrunner Verizon (NYSE:VZ). But Verizon didn't submit one of the highest first-round bids, a pair of the sources said.
- The process has another week or likely more time to play out.
Mon, May 16, 9:16 AM
- AT&T (NYSE:T) is acquiring video provider (and existing partner) Quickplay Media from Madison Dearborn Partners.
- Terms were undisclosed. Quickplay specializes in over-the-top and "TV Everywhere" service, and already supports AT&T's authenticated-subscriber offering on U-verse and is working on the company's upcoming streaming offerings (DirecTV Now, DirecTV Mobile and DirecTV Preview).
- They expect to close the deal in mid-2016, and AT&T will retain Quickplay's 350-plus employees and contractors.
- Now read How To Retire On $15 A Day »
Tue, Apr. 19, 8:39 PM
- Yahoo (NASDAQ:YHOO) didn't say anything about its sales process during its Q1 earnings webcast, and swore off giving any updates along the way.
- But speculation about the shortlist is mostly on the mark, according to the latest from Reuters, which says Verizon's (NYSE:VZ) there (with help from Guggenheim, LionTree, Allen & Co.), along with Yellow Pages owner YP -- which has backing from AT&T (NYSE:T) on the bid, sources said.
- Japanese online retailer Rakuten (OTCPK:RKUNY) is a new name that's kicking tires as well. Among private equity, Apax Partners, TPG, Bain Capital, Apollo Global Management (NYSE:APO) and Warburg Pincus are all accounted for, and may be allowed to team up in round 2.
- No two offers were identical, sources said, so Yahoo now must look at the structures, assets and offers to sort out value -- hopefully in time to wrap up in June.
- SoftBank (OTCPK:SFTBY) and Alibaba (NYSE:BABA) aren't taking part -- but they could get involved with the company after the fate of its core assets is settled.
- YHOO wrapped an after-hours session up 1.1%.
- Now read Yahoo: Who's Ready To Take On A Legacy Digital-Native Media Turnaround? »
Sun, Apr. 17, 8:56 PM
- With tomorrow's deadline arriving for bidders for core assets of Yahoo (NASDAQ:YHOO), the long-shot bid of Time Inc. (NYSE:TIME) won't be among them, as the company decided fixing the business was too big a task, The Wall Street Journal reports. (It would have also faced severe leveraging trying to swallow the business.)
- With a number of bidders bowing out as expected, Verizon (NYSE:VZ) is indeed a front-runner among the few firms moving forward. Aligning somewhat with a number of other media reports (and rumors), now bowing out for sure are Alphabet (GOOG, GOOGL), Comcast (NASDAQ:CMCSA), AT&T (NYSE:T) and IAC/InteractiveCorp (NASDAQ:IAC), the Journal says.
- It appears Verizon's biggest competition may come from private equity (Bain Capital, TPG, Advent International), reinforcing the strength of Verizon's bid. It was unclear whether KKR would stay in the bidding, and the Daily Mail (OTCPK:DMTGY) may still be in, but with P-E help.
- Now read Why Verizon Is The Clear Front-Runner To Buy Yahoo »
Thu, Apr. 7, 2:58 PM
- Yahoo (NASDAQ:YHOO) shares have jumped into positive ground, now up 1.2%, on news that Verizon (NYSE:VZ) is proceeding with a bid for its core assets.
- Shares were down as much as 2.6% today.
- Alphabet unit Google (GOOG, GOOGL) is also weighing its own bid, Bloomberg reports, with interest also showing up from Bain Capital and TPG. Time Inc. (NYSE:TIME) is still out there as well.
- AT&T (NYSE:T) and Comcast (NASDAQ:CMCSA) are losing interest, Bloomberg also said, with Microsoft (NASDAQ:MSFT) also deciding it wouldn't bid.
- Verizon might also put in for Yahoo's Japan interests, the report said.
- Updated 3:06 p.m.: After a big spike into positive ground, Yahoo shares have gone negative again, -0.1%. Verizon is said to value the core business at less than $8B, vs. Yahoo's hopes for a $10B valuation, and has engaged three banks.
- Now read Yahoo Should Be At Least $48 A Share »
Thu, Mar. 3, 3:41 PM
- Speaking at Morgan Stanley's Technology, Media and Telecom conference, Yahoo (NASDAQ:YHOO) CFO Ken Goldman says aside from a spinoff of its core Internet business, the company's looking at selling "non-core assets" for $1B-$3B.
- Those assets include patents and property, and a committee formed to explore alternatives to the spinoff is considering some quick sales of the non-core assets. The company's sold or licensed more than $600M in patents over the past three years.
- Yahoo has launched a relatively formal auction process for its search business, with telecoms including Verizon (NYSE:VZ), AT&T (NYSE:T) and Comcast (NASDAQ:CMCSA) emerging as likely favorites alongside other companies (like longshot Time Inc.) and private equity.
- Previously: Bloomberg: Yahoo approaching potential buyers as soon as today (Feb. 22 2016)
- Previously: Bain and TPG reportedly eyeing Yahoo; shares close down 4.7% post-earnings (Feb. 03 2016)
Thu, Feb. 25, 11:13 AM
- The FTC has signed off on Sinclair Broadcast Group's (SBGI +1.1%) purchase of the Tennis Channel.
- Sinclair came to a $350M agreement last month to buy the channel from its owners, a mix of private-equity firms and smaller stakeholders DirecTV (NYSE:T) and Dish Network (NASDAQ:DISH).
- The FTC gave the deal early termination of its antitrust review. Sinclair will get the channel along with its OTT services, TC Plus and TV Everywhere, and expects to benefit from more than $200M of net operating loss carry-forwards.
- Previously: Sinclair Broadcast Group seals $350M deal for Tennis Channel (Jan. 27 2016)
Wed, Feb. 3, 7:30 PM
- Shortly after Yahoo (NASDAQ:YHOO) confirmed it's exploring "additional strategic alternatives" while pushing ahead with a reverse spinoff of its core business, the FT reports Bain, TPG, and other P-E firms are weighing potential bids for core Yahoo. The paper adds AT&T (NYSE:T) and InterActiveCorp (NASDAQ:IAC) "are also believed to be examining the company."
- Many firms are expected to make full or partial bids for core Yahoo. CFO Ken Goldman: "A number of companies have said they want to look at us, and there are a number of private equity firms that are interested in looking at us. I’m not saying that we’ve received offers ... I’m saying parties have expressed interest in us. And what we’re saying is that we’ll be open [to] that.”
- Re/code's Kara Swisher reports Yahoo has hired well-known tech i-banker Frank Quattrone to help it explore options; Goldman Sachs and Morgan Stanley are already on the payroll. "It is clear to us that what is happening inside is very dysfunctional," says an unnamed major investor talking to Swisher.
- Meanwhile, with a sale effort and job cuts already expected, Yahoo fell below $28 in regular trading following its Q4 report and myriad of job cut, writedown, and strategic review announcements. Weak guidance may have weighed: Yahoo guided in its earnings slides (.pdf) for Q1 GAAP revenue of $1.05B-$1.09B and 2016 revenue of $4.4B-$4.6B, below consensus estimates of $1.14B and $4.78B.
2016 ex-TAC revenue guidance of $3.4B-$3.6B is below 2015 ex-TAC revenue of $4.09B, which itself was below 2014's $4.4B. Non-GAAP op. income is expected to drop to $150M-$250M from 2015's $342M and 2014's $755M.
- Also of note: 1) $230M of Yahoo's $4.46B goodwill writedown was related to the $1.1B Tumblr acquisition. On the earnings call (transcript), Yahoo disclosed Tumblr failed to hit the company's $100M 2015 revenue target. 2) Along with everything else, Yahoo has begun exploring the sale of "non-strategic assets" such as patents and real estate. It estimates such sales could yield $1B-$3B in cash by year's end.
- Prior Yahoo coverage
Wed, Jan. 27, 4:30 PM
- After some lengthy talks, Sinclair Broadcast Group (SBGI +1.7%) has agreed to acquire the Tennis Channel for $350M.
- The company -- the nation's biggest local broadcaster -- says it will benefit from more than $200M of net operating loss carry-forward, which Sinclair estimates to be worth about $65M in present value.
- Sinclair had begun talks as of September with the various private-equity owners of the network, including Apollo Partners and Bain Capital Ventures, as well as smaller stakeholders DirecTV (NYSE:T) and Dish Network (NASDAQ:DISH).
- The deal includes established over-the-top subscription services, TC Plus and TV Everywhere, and the channel has rights to 90% of all televised tennis in the U.S.
- "The Company expects 2015 pro forma operating cash flow for the contracted subscriber increases (including the additional license fees and advertising revenues resulting from such increased carriage), to be approximately $60M, the synergies of which will be phased in over 18 months, and resulting in a 2015 pro forma purchase multiple, including the present value of the NOLs, of 4.8x and approximately $0.40 of incremental cash flow per share," says Sinclair CFO Chris Ripley.
- The company will discuss the acquisition in a conference call set for tomorrow at 9 a.m. ET.
- Previously: WSJ: Sinclair in talks to acquire Tennis Channel (Sep. 21 2015)
Wed, Jan. 20, 8:21 PM
- Vodafone (VOD -2.1%) looks to be moving ahead with a public offering of its India wireless business -- a deal that could be a gateway to asset spinoffs or even more merger talk.
- Heavy chatter about a merger with Liberty Global (LBTYA -1.5%) covered much of last year, though it pivoted to more modest talk of asset swaps in Europe before even those discussions were called off. A New Year's Eve report posited that merger talks were back on.
- AT&T (T -1.7%) is said to be a prospective merger partner too, now that its acquisition of DirecTV is settled.
- Vodafone still has a tax issue to sort out with India, and it could use a March spectrum auction to fill out local markets for 4G service. And then: "Statements made by Group CEO Vittorio Colao make us believe a listing in 2016 is not only possible ... but probable — especially as we expect outstanding tax cases to finally get resolved and missing 4G spectrum gaps filled," says Bernstein's Chris Lane.
Fri, Jan. 15, 7:18 PM
- Telefonica (TEF -3.5%) is expressing interest in buying Latin American assets from AT&T (T -0.9%) that could come to $10B in value, Reuters reports.
- AT&T acquired the pay TV assets in its acquisition of DirecTV last year, and CEO Randall Stephenson said in December that the company would consider selling them but was in "no rush" and would be patient.
- A source told Reuters that other parties were interested in specific country assets -- AT&T acquired services in Brazil, Colombia, Venezuela and Argentina among other countries -- so AT&T could run multiple sale processes and deal with a company like Liberty Global (LBTYA -4.7%).
- Meanwhile, Telefonica has been making portfolio changes but against some €50B in debt (about $54B). It's looking to sell Spanish infrastructure and agreed to sell its O2 business in the UK to CK Hutchison holdings for $15B.
Dec. 2, 2015, 9:42 PM
- While speculation about buyers for Yahoo's (NASDAQ:YHOO) core Internet business is focused on private equity, Yahoo's evolution as a media company means a number of media/telecom firms are in play for all or part of the business.
- A sale of the core business might not happen -- it's not the main purpose of Yahoo's meeting -- but on the other hand, a transaction would certainly value it at more than where it is locked up in Yahoo, which may be less than zero because of the investments in Alibaba and Yahoo Japan.
- Estimates vary widely on the Internet business' value, from just under $2B to as much as near $4B. Comcast (NASDAQ:CMCSA) could have room for that after it failed to acquire Time Warner Cable; it's been spreading out investments in a number of media and Internet companies this year, and it could lump in Yahoo's properties with its own Xfinity online video.
- Like Verizon (NYSE:VZ), another potential Yahoo Internet suitor, Comcast has also been shoring up its ad-tech bona fides with some 2015 acquisitions. Verizon could use Yahoo's data to present a better competitive face to Google and Facebook, though it would have redundancies to deal with.
- Other companies like News Corp. (NWS, NWSA) or Time Inc. (NYSE:TIME) may be more interested in some pieces of Yahoo's business rather than the whole. SunTrust analyst Robert Peck even considers AT&T (NYSE:T) and Walt Disney (NYSE:DIS) prospective buyers; Disney for tapping the data to market theme parts and movies, and AT&T trying to match up better against the Verizon/AOL combo.
- Previously: FT: P-E firms show interest in Yahoo's core business (updated) (Dec. 02 2015)
Nov. 23, 2015, 8:34 PM
- Data center operators probably aren't in a buying mood for facilities that might be for sale -- particularly CenturyLink's, Macquarie suggests in a new report -- but private-equity firms could come in with bids.
- CenturyLink (NYSE:CTL), the nation's third-largest local phone company, plans to sell 59 centers worldwide, and while Macquarie had thought Digital Realty Trust (NYSE:DLR) would get involved, analyst Kevin Smithen has changed his view after attending an industry trade show.
- He now doubts that a buyer will come from among Digital Realty, DuPont Fabros (NYSE:DFT), Equinix (NASDAQ:EQIX), CyrusOne (NASDAQ:CONE), CoreSite or QTS Realty, with a limited "pool of logical and capable buyers" for assets from CenturyLink, or from Verizon (NYSE:VZ) or AT&T (NYSE:T). But near term, "private equity seems like the most likely acquirer of assets this size."
- While CenturyLink assets are for sale, Verizon CFO Fran Shammo tried to shut down "speculative" reports that the company would pursue $10B in asset sales.
Oct. 21, 2015, 4:18 PM
- Comcast (CMCSA -0.7%) is inching toward introducing its own wireless service, triggering part of a 2012 airwaves deal that lets it resell Verizon's (NYSE:VZ) service, Bloomberg reports.
- Verizon CFO Fran Shammo said during the company's earnings call yesterday that unnamed cable companies had said they'd execute their right to resell Verizon airwaves as part of the deal where Verizon bought spectrum from a cable consortium.
- Bloomberg says that Comcast plans a hybrid cellular/Wi-Fi service, not unlike Google's Project Fi and which would draw on Comcast's network of Wi-Fi hotspots that may be 10M strong.
- With notification of Verizon, Comcast could start a market trial within six months and offer it commercially by this time next year.
- Good for T-Mobile (TMUS -1.2%) either way? The carrier comes up in rumors about a Comcast merger -- though Comcast denied them earlier this year -- but in any cast, a Comcast entry would press the big two of AT&T (NYSE:T) and Verizon more. “This will be bad for the carriers, with the possible exception of T-Mobile, and good for cable,” says New Street Research's Jonathan Chaplin.
- And T-Mobile chief John Legere has been not-too-subtly dropping lines about a merger with his company: "You really believe that the Comcast future in wireless is to be an MVNO with Verizon? I mean, give me a break."
- Previously: Legere: T-Mobile will bid in auction; Verizon video a 'debacle' (Sep. 18 2015)
- Previously: Comcast source denies interest in T-Mobile purchase (Jun. 17 2015)
AT&T, Inc. provides telecommunication services and products, including wireless communications, local exchange services, long-distance services, data/broadband and Internet services, video services, telecommunications equipment, managed networking and wholesale services. It operates business... More
Industry: Telecom Services - Domestic
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