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AT&T Inc. (T)

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  • Fri, Jan. 16, 2:59 PM
    • AT&T's (T +1.6%) $2.5B purchase of Mexican mobile carrier Iusacell is officially on the books. Ma Bell has used the occasion to reiterate the merger will allow it to offer cross-border mobile services. "It won't matter which country you're in or which country you're calling it will all be one network, one customer experience."
    • AT&T has also announced Thaddeus Arroyo, formerly the president of AT&T's Technology Development unit and before that its CIO, will run Iusacell. Adrian Steckel, until now Iusacell's CEO, will "assist Arroyo with the integration of Iusacell into AT&T."
    • Separately, Reuters reports China Telecom (CHA -2.2%) is "preparing a possible bid" to build and run a Mexican wholesale mobile network expected to cost $10B over 10 years. The network, mandated by Mexico's 2013 telecom reform bill, aims to allow America Movil's (AMX -0.6%) rivals (such as Iusacell) to provide better coverage without having to rely on AMX, which is still looking for a buyer for the Mexican assets it's shedding to bring its share below 50%.
    | 4 Comments
  • Fri, Jan. 9, 5:00 AM
    • Mexican broadcaster Grupo Televisa (NYSE:TV) has completed the sale of its 50% stake in mobile operator Iusacell to JV partner Grupo Salinas, clearing the way for AT&T (NYSE:T) to acquire the cellphone company.
    • Televisa used some of the proceeds from the $717M sale to buy Mexican cable company Cablevision Red, a regional operator with around 650K subscriptions, for about 3B pesos ($204M).
    • Previously: AT&T receives approval for Iusacell deal (Dec. 22 2014)
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  • Dec. 22, 2014, 1:40 AM
    • Mexico's Federal Competition Commission has approved AT&T's (NYSE:T) $1.7B purchase of local cellphone company Iusacell.
    • The competition regulator set conditions on the deal to "avoid risks to the process of competition" in markets where Iusacell would compete with America Movil (NYSE:AMX), which previously counted AT&T as a minority investor.
    • AT&T sold its America Movil shares in the summer, before announcing its deal with Iusacell in November.
    | 10 Comments
  • Nov. 7, 2014, 4:22 PM
    • Iusacell has 8.6M Mexican mobile subs, and a 3G network that covers 70% of the country's population (120M). AT&T (NYSE:T) is paying $2.5B in cash to buy Iusacell from parent Grupo Salinas, after accounting for debt. The deal is expected to close in Q1 2015.
    • AT&T highlights Mexico's relatively low mobile/smartphone penetration rates while discussing the deal, as well as synergies with its U.S. mobile ops and recent regulatory moves meant to loosen America Movil's (NYSE:AMX) market dominance. AT&T was previously believed to be interested in Mexican assets AMX is looking to sell to appease regulators.
    • AT&T "plans to expand Iusacells network to cover millions of additional consumers and businesses in Mexico." At the same time, AT&T won't be acquiring Iusacell's Total Play pay-TV/wireline broadband business. DirecTV (NASDAQ:DTV), which AT&T is set to acquire, owns 41% of local satellite TV provider Sky Mexico.
    • Separately, AT&T has set a 2015 capex budget of $18B, down from 2014's $21B. The carrier declares its Project VIP network expansion project to be ahead of schedule, with the 4G expansion part largely complete.
    • T +0.7% AH. AMX -0.6%.
    | 8 Comments
  • Oct. 7, 2014, 2:15 PM
    • America Movil's (AMX -0.1%) planned Mexican telecom asset sale could extend beyond Mexico's eastern coast, Carlos Slim tells Bloomberg. AMX has already announced plans to sell Eastern Mexican assets to appease regulators who want the carrier's local telecom share to fall below 50%.
    • AT&T (NYSE:T), which recently sold its AMX stake to Slim for $5.6B, has suggested it's interested in the assets. For now, Slim only says AMX is "working with the potential buyers to have an agreement."
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  • Sep. 23, 2014, 1:01 PM
    • Tech news site BSN, not historically a major source for telecom M&A rumors: "Sources close to both Vodafone (VOD +0.3%) and AT&T (T -0.7%) have said that executives from the two companies are laying the groundwork for a possible acquisition, merger or partnership ... AT&T is seen to take ownership of Vodafone and its various business units around the globe by first quarter of 2015."
    • Vodafone has turned positive on the report; shares were previously down over 1%. AT&T/Vodafone rumors are, of course, nothing new. However, the DirecTV deal and AT&T's reported displeasure with Vodafone's wireline expansion efforts have led to a measure of investor skepticism about them.
    • SoftBank has also been rumored to be a potential Vodafone suitor, given the company has abandoned (for now) its efforts to merge Sprint with T-Mobile, and is sitting on an Alibaba stake currently worth a pre-tax $70B.
    | 11 Comments
  • Sep. 22, 2014, 12:06 PM
    • Otter Media, a JV owned by AT&T (T +0.1%) and ex-News Corp. president Peter Chernin, is buying a controlling stake in leading YouTube content provider Fullscreen. Re/code states the deal will likely value Fullscreen in the $200M-$300M range.
    • Fullscreen's network covers 50K+ content creators, and is responsible for 4B monthly video views. Yahoo and Time Warner had reportedly expressed interested in the startup earlier in 2014.
    • In March, Disney agreed to buy fellow YouTube content provider Maker Studios for up to $950M. With Maker producing 5.5B monthly video views at the time of the deal, AT&T/Chernin may have gotten a relative bargain. Look for AT&T to promote Fullscreen's content to its U-verse and/or mobile subs.
    | Comment!
  • Sep. 16, 2014, 5:44 PM
    • A top AT&T (NYSE:T) executive says the company is open to acquisitions in Mexico, where America Movil (NYSE:AMX) has said it would sell off parts of operations to cut its market share to below 50% from 70% to avoid a regulatory crackdown, creating a rare opening for an acquirer to get a foothold in the country.
    • AT&T's attention is focused on closing the $49B deal for DirecTV, but Chief Strategy Officer John Stankey says Mexico is a fast-growing market of interest to the company, and that AT&T has the wherewithal to do other deals if opportunities arise.
    | 8 Comments
  • Sep. 11, 2014, 2:05 PM
    • The state attorneys general now working with the Justice Department to determine whether Comcast's deal to buy Time Warner Cable is legal have expanded their investigation to include AT&T's (T +0.2%) proposed $48.5B deal to buy DirecTV (DTV +0.1%), Reuters reports.
    • New York and California are part of the multi-state review, according to the report.
    | 1 Comment
  • Sep. 1, 2014, 1:56 AM
    • America Movil (NYSE:AMX) has hired Bank of America (NYSE:BAC) to sell a significant amount of its wireline/mobile assets, in order to lower its market share by less than 50%.
    • Potential buyers include AT&T (NYSE:T) and SoftBank (OTCPK:SFTBY), a source tells Bloomberg.
    • The move is in response to new Mexican regulation designed to curb the company's dominance. America Movil announced the sale in July.
    | 1 Comment
  • Aug. 25, 2014, 12:25 PM
    • The NY Post reports AT&T (T +0.1%) has reached an agreement with the DOJ that paves the way for the agency to clear the DirecTV (DTV +0.8%) merger. No details are given on what conditions AT&T has agreed to.
    • Regulators have been expected to sign off on the $48.5B merger, in spite of concerns about its potential impact on pay-TV prices in areas where AT&T and DirecTV currently compete.
    • AT&T has tried to appease regulators by promising (among other things) to continue offering DirecTV's services on a standalone basis for 3 years, and to make big rural broadband investments.
    • In addition to the DOJ, the FCC is reviewing the merger.
    | 5 Comments
  • Aug. 22, 2014, 10:03 AM
    • Vodafone (VOD +1.3%) is paying €72.7M ($97M) to acquire a 72.7% stake in Greek broadband/phone service provider Hellas Online. The deal will bring Vodafone's total stake above 91%, and is expected to close in Q4.
    • Hellas had 519K customers at the end of 2013, good for an estimated 11% local share. It had 2013 revenue of €227.4M, and EBITDA of €68.4M.
    • The deal follows Vodafone's acquisitions of German cable provider Kabel Deutschland and Spanish cable provider ONO, as the carrier pushes ahead with its goal of offering mobile/wireline bundles (both by itself, and via partnerships) throughout Europe.
    • Separately, The Daily Mail has passed on a rumor that AT&T's (NYSE:T) advisers are now "working around the clock on a cash bid worth more than £3 a share" for Vodafone.
    • The rumor should be taken with a heavy dose of salt, given: 1) AT&T is currently preoccupied with closing the DirecTV acquisition. 2) It implies AT&T would be paying a 46% premium to Vodafone's current London trading price, and valuing the company at ~$130B. 3) AT&T, which has a $179B market cap and $84B in debt, would be very hard-pressed to finance a ~$130B deal solely with cash.
    • A 6-month prohibition on an AT&T bid for Vodafone ended in July. However, AT&T CEO Randall Stephenson stated in March "the window may be closing" for his company to acquire European wireless assets, and is reportedly unhappy with Vodafone's wireline expansion efforts.
    | 4 Comments
  • Jul. 31, 2014, 1:02 PM
    • France's Iliad (OTC:ILIAF) is offering $15B in cash for a 56.6% stake in T-Mobile USA (TMUS +7.3%) at a price of $33/share. Iliad values the remaining 43.4% at $40.50/share. Sprint (S -5.3%) has been reported to be planning a ~$40/share deal.
    • Iliad says it has obtained financing from unnamed banks, and would also do a capital raise to help pay for the deal. One issue: Iliad has a current market cap of just $16B, less than T-Mobile's $24.8B and Sprint's $30.6B. Sprint has reportedly lined up a $40B+ debt package to finance a T-Mobile deal.
    • A source tells the WSJ Iliad, which has upended the French mobile market with its aggressive pricing, views a T-Mobile merger as a "one-time opportunity to enter the world's-largest telecoms market."
    • Iliad also thinks (perhaps with good reason, given FCC/DOJ remarks) regulators will be more comfortable with its bid than Sprint's, since Iliad has no U.S. presence.
    • AT&T (T -2%) and Verizon (VZ -2.3%) have joined Sprint in selling off, as investors mull the possibility of a deal that would leave the number of nationwide U.S. carriers at 4. Concerns about Iliad's pricing history might also be weighing on shares.
    • Related tickers: OTCPK:SFTBF, OTCQX:DTEGY
    • Earlier: Iliad reportedly bids for T-Mobile USA
    | 13 Comments
  • Jul. 29, 2014, 12:14 PM
    • "I’m skeptical it can be replicated," says Elevation LLC's Stephen Sweeney about Windstream's (WIN +12.9%) REIT spinoff plans. "It’s very unclear if other large cap companies can have their companies viewed by the IRS as real estate."
    • UBS also has its doubts: It thinks AT&T (T +3.3%) and Verizon (VZ +1.8%) would have to open up their networks to rivals if they were spun off into REITs, something it doesn't think the carriers will be keen on doing.
    • Oppenheimer's Tim Horan is more positive, albeit while cautioning Windstream's spinoff isn't a done deal. "If successful with this restructuring, and there are obviously high regulatory barriers, this will be a game changer for the valuation of non-REIT infrastructure stocks in our industry.”
    • AT&T, Verizon, Windstream, Frontier (FTR +11.7%), and CenturyLink (CTL +4.2%) have pared their morning gains a bit amid volatile trading on very heavy volumes. AT&T has seen 66M shares trade vs. a daily average of 19.3M; Frontier has seen 89M trade vs. an average of 6.9M.
    • Enthusiasm about Windstream's spinoff stems not only from the tax benefits provided to REITs - American Tower's tax expense has been halved since it converted into a REIT in 2012 - but also from the potential for spinoffs to spark new M&A activity.
    • Windstream CFO Tony Thomas: "The REIT is going to be uniquely positioned to be in a great spot to help unlock value at other companies ... We have a good understanding of how the REIT opportunity could work in the telecom landscape."
    • Earlier: Telcos soar following Windstream's REIT announcement
    | 6 Comments
  • Jun. 30, 2014, 1:03 PM
    • Carlos Slim is paying $5.6B to buy AT&T's (T +0.1%) 8.3% stake in America Movil (AMX +0.3%), according to SEC filings. With the stake worth $6.5B based on AMX's current market cap, Slim is getting a sizable discount in exchange for preventing AT&T from having to sell the shares through a public offering that could depress prices.
    • The deal makes good on a promise by AT&T to unload the stake, and thus eliminate a conflict of interest and potential regulatory hurdle as the company gets set to buy DirecTV.
    • DirecTV has 11.9M Latin American subs, and AT&T (with the help of DirecTV's spectrum) plans to use it to offer TV/broadband bundles in the region.
    • Previous: Slim to buy AT&T's America Movil stake
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  • Jun. 27, 2014, 3:54 PM
    • Carlos Slim plans to buy AT&T's (T +0.4%) 8.3% stake in America Movil (AMX +4.4%). After accounting for the spike in AMX shares that has followed the news, the stake is currently worth $6.4B.
    • The stake includes 24% of AMX's voting shares; its purchase further solidifies Slim's hold over the giant Latin American carrier as it continues expanding into Europe.
    • AT&T announced in May it would sell its AMX stake to keep regulators happy as it acquires DirecTV, whose Latin American reach is substantial and set to get bigger post-acquisition. The sale will also help Ma Bell pay for the DirecTV deal's $14.6B cash component.
    | Comment!
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Company Description
AT&T Inc, through its subsidiaries and affiliates, provides wireless and wireline telecommunications services in the United States and internationally. The Company has three reportable segments: Wireless, Wireline, and Other.