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
May 7, 2014, 4:09 PM
May 1, 2014, 3:14 AM
- AT&T (T) has approached DirecTV (DTV) about buying the satellite-TV provider in a deal that could be worth at least $40B, the WSJ reports. DirecTV, whose market cap is $39.5B, is open to a deal.
- The combined company would have almost 26M pay TV subscribers vs the 30M that Comcast would have if it acquires Time Warner Cable.
- As with the Comcast-TWC deal, a major question is whether regulators would authorize a tie-up between AT&T and DirecTV, with broadband competition likely to be the main issue in any review.
Apr. 28, 2014, 12:40 PM
- The FCC plans to add 128.5MHz. of spectrum to its screening procedures for vetting mergers and spectrum sales. Sprint (S -4.1%) owns 101MHz. of the spectrum, via its acquisition of Clearwire and its valuable 2.5GHz. band spectrum (good for urban areas).
- The rule change, due for a May 15 vote, relates to the FCC's scrutiny of deals that give a carrier more than 1/3 of all spectrum in a particular market. Sprint will exceed that threshold in most big markets once the change goes through.
- Though Sprint won't be forced to sell spectrum in those markets, it could have a much harder time adding to its spectrum position within them via M&A - say, through a merger with T-Mobile USA (TMUS -3.6%).
- Separately, the FCC plans to provide tougher scrutiny of deals that would lead to a single carrier having over 1/3 of all quality low-frequency (sub-1GHz., better for buildings and rural areas) spectrum in a market, and to limit how much a carrier with such a spectrum position can bid in 2015's anticipated low-frequency auctions.
- AT&T (T +1.3%) and Verizon (VZ +1.5%), which together control a giant share of low-frequency U.S. mobile spectrum, are the companies targeted by those proposals. Sprint, T-Mobile, and other rivals have been pressuring the FCC to limit how much spectrum AT&T and Verizon can buy in the 2015 auction.
Mar. 13, 2014, 4:45 PM
- The FCC's approval of AT&T's (T -0.1%) purchase of Leap (LEAP +0.7%) and its high-frequency spectrum assets was widely expected. While regulators have been nervous about AT&T/Verizon's huge share of low-frequency mobile spectrum, smaller rivals Sprint and T-Mobile have considerable high-frequency assets of their own.
- In addition to the spectrum, the deal gives Ma Bell Leap's 4.6M prepaid subs and the Cricket brand. The latter will be replacing AT&T's own Aio prepaid brand.
- Leap shareholders have already approved the deal. They'll be getting $15/share ($1.2B) in cash, as well as proceeds from the sale of low-frequency spectrum Leap acquired for $204M.
Mar. 10, 2014, 12:02 PM
- As European 4G investments ramp, "the window may be closing" on acquiring continental wireless assets, AT&T (T -0.4%) CEO Randall Stephenson stated last week at a Morgan Stanley conference (transcript). At the same time, he argued "there are still other opportunities" in Europe, such as those tied to the development of "global" SIM cards that can work with any type of device worldwide.
- Those remarks were highlighted by a weekend FT column declaring Stephenson had "poured more cold water." on hopes of an AT&T bid for Vodafone (VOD -4.2%). The AT&T chief has already been reported to have told investors further cable acquisitions by Vodafone would complicate a bid.
- Meanwhile, Vodafone CEO Vittorio Colao states recently-acquired Kabel Deutschland will act as the "core" of a wireline business in Germany and possibly other countries. He adds Vodafone's wireline ops will expand to include security, Web hosting, and entertainment services (previous).
- Colao was cryptic when asked about Vodafone's reported efforts to acquire Spanish cable giant ONO. "We'll see what happens."
Mar. 7, 2014, 11:19 AM
- Sources tell Reuters (translation) Vodafone (VOD -2.8%) has raised its bid for Spanish cable giant ONO, and has reached a preliminary deal with ONO shareholders collectively possessing a controlling stake.
- No word on the specific offer price. Vodafone was previously reported to have made a rejected €7B ($9.6B) bid for ONO.
- One source states Vodafone plans to formally present its offer before ONO's board meets on March 13 to approve recently-announced plans to pursue an IPO.
- Vodafone is selling off on the report. A successful Vodafone bid for ONO, coming on the heels of its $14.2B Kabel Deutschland acquisition, could lower the odds AT&T (T +0.3%) will make an offer for the company once its 6-month waiting period ends. AT&T CEO Randall Stephenson has reportedly told investors further cable acquisitions by Vodafone would complicate a deal.
Feb. 25, 2014, 1:56 PM
- Dow Jones reports AT&T (T -1%), long rumored to be weighing a bid for Vodafone (VOD -1.1%), isn't thrilled with Vodafone's efforts to grow its cable assets via M&A, and would prefer the company focus on mobile.
- Vodafone, which just closed the Verizon Wireless deal, has been eying European wireline carriers as part of an effort to offer an end-to-end suite of telecom services in EU markets.
- The company gobbled up German cable provider Kabel Deutschland last year for $14.2B, and reportedly made a failed bid this year for Spanish cable giant ONO. There have also been rumors Vodafone is open to a bid for U.K. satellite TV/broadband provider BSkyB.
- Last month, AT&T gave up the opportunity to bid on Vodafone for six months, but is still reportedly open to making an offer afterwards.
- Vodafone shares have ticked lower on the report.
Jan. 29, 2014, 12:22 PM
- Though it recently gave up the opportunity to make a bid for Vodafone (VOD +1.9%) within the next six months, AT&T (T -1.6%) remains interested in a possible deal for the giant international carrier, sources tell Bloomberg.
- The news service adds AT&T's recent decision came after U.K. regulators demanded the company either deliver a formal bid for Vodafone within 28 days on account of ongoing reports, or walk away for six months. Ma Bell reportedly chose the latter in order to avoid "negotiating under such a tight deadline and because of the possibility of exemptions from the moratorium."
- Vodafone shares have caught a bid on the report, which comes a day after AT&T beat Q4 estimates, but also reported soft subscriber adds and forecast a ~19% 2014 free cash flow decline.
Jan. 27, 2014, 3:43 AM
- Vodafone's (VOD) shares have slumped 6.4% in London after AT&T (T) said it has no intention of making an offer for the U.K. telecom operator.
- AT&T made a statement to the London Stock Exchange in response to a request from the the U.K.'s Takeover Panel following much speculation that the U.S. provider was interested in Vodafone after the latter agreed to sell its 45% stake in Verizon Wireless to Verizon for $130B last year.
- The statement means that AT&T can't make an offer for Vodafone for the next six months unless the British company agrees to it, another firm makes a proposal, or the authorities decide that circumstances have changed materially. (PR)
Dec. 17, 2013, 10:03 AM
- U.K. media reports (I, II) indicate AT&T (T -0.5%) and Liberty Global (LBTYA -0.9%) are both considering bids for mobile/wireline carrier Cable & Wireless Communications (CBWYY). C&W shares are up 3% in London.
- Cable & Wireless Communications, a separate entity from Cable & Wireless Worldwide (acquired by Vodafone last year), offers mobile, wireline broadband, and TV services in a number of Central American and Caribbean markets. The carrier recently raised $1.4B through various asset sales.
- The reports come as AT&T announces the $2B sale of its Connecticut wireline ops to Frontier. Multiple reports suggest Ma Bell is open to expanding in Europe and/or Latin America.
Dec. 17, 2013, 7:38 AM
- Frontier Communications (NASDAQ:FTR) buys AT&T's (NYSE:T) wireline residential and business service that serves Connecticut for $2B in cash and related assets.
- The company expects the transaction to be accretive in the first year following the closing which is targeted for the second half of 2014 following regulatory approvals.
- FTR +13.8% premarket.
Nov. 21, 2013, 11:29 AM
- Vodafone (VOD +2.2%) CEO Vittorio Colao: "We have a strategy and we are putting a lot of money into it, but if somebody comes and says, ‘You have really beautiful assets,’ then I will agree."
- AT&T (T +0.2%) has been reported more than once to be weighing a bid for Vodafone, now that the giant international carrier has sold its Verizon Wireless stake for a $130B windfall.
- Colao also says Vodafone is seeing "very early signs" of improvement in recession-hit Spain, where the company's sales have been steadily declining, but also admits Vodafone has "lost a bit of market share" in the country.
- He adds Vodafone is open to M&A opportunities in Spain and other European markets - EU regulators are encouraging cross-market consolidation - as well as in India, where Vodafone is set to buy out its minority partners. Other EU carriers are also looking to get bigger.
- Yesterday: Vodafone's capex could stay elevated, CEO outlines ambitious goal
Oct. 31, 2013, 3:38 PM
- AT&T (T +0.2%) has stepped up work on a strategy for what would be a complex and expensive deal, says Bloomberg, in part trying to identify which assets it would retain and who would be buyers of the businesses to be spun off.
- The combined AT&T and Vodafone (VOD +2.3%) would have a market cap in excess of $250B, huge operations here and across the pond, and more than 500M wireless subscribers, giving it the scale to challenge Google and Apple when negotiating cell phone subsidies, and squeezing out profits from rising technologies like mobile advertising.
- Any deal, of course, would have to wait until Vodafone closes the sale of its Verizon Wireless stake, expected to occur early next year.
Oct. 31, 2013, 11:24 AM
- Unsurprisingly, Leap Wireless (LEAP -0.2%) shareholders have overwhelmingly given a thumbs-up to the company's acquisition by AT&T (T +0.2%). Over 99% of shares were voted in favor of the deal at a special meeting.
- The DOJ and FCC, which haven't always seen eye-to-eye with AT&T, still have to approve the deal. But while the FCC might seek spectrum concessions, few expect the acquisition to be fully vetoed.
- AT&T is paying $1.19B for Leap's equity, and also assuming $2.8B in debt and giving Leap shareholders the proceeds from the sale of spectrum Leap previously acquired for $204M. Once the deal closes, Ma Bell plans to retire its fairly new Aio prepaid brand in favor of Leap's Cricket brand.
Oct. 20, 2013, 7:58 PM
- Cashing in on the consolidation action among cell phone tower operators, AT&T (T) agrees to lease/sell its tower portfolio to Crown Castle International (CCI) for $4.85B in upfront proceeds.
- Crown Castle will have the rights to lease about 9.1K AT&T towers and purchase roughly 600 others. The average term of the lease rights is about 28 years, after which Crown Castle has an option to purchase the towers for approximately $4.2B. AT&T will sublease space on the towers for at least 10 years with an option to renew up to a total of 50 years.
- AT&T had put the portfolio on the block in September, and two weeks ago a deal with Crown Castle was reported to be close.
Oct. 18, 2013, 6:49 PM
- AT&T (T) discloses in an FCC filing it plans to phase out its new Aio prepaid wireless brand in favor of Leap Wireless' well-known Cricket brand, following the closing of the Leap acquisition.
- AT&T launched Aio earlier this year in an effort to halt share losses in the prepaid segment, which is accounting for a growing share of U.S. smartphone sales. Ma Bell also offers prepaid services through its GoPhone plans, which have more of a low-end focus relative to Aio.
- The Leap deal is widely expected to be cleared by regulators, though some think more spectrum concessions might be needed.
- Q3 results arrive on Wednesday. Archrival Verizon reported strong Q3 subscriber figures yesterday.
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
Country: United States
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