AT&T ‘set to receive $15bn’ in plan to offload DirecTV
AT&T has received bids for more than US$15 billion for its satellite TV operation, DirecTV, according to reports.
The $15 billion mentioned is less than a quarter what AT&T paid for DirecTV only five years ago.
According to yesterday’s Wall Street Journal, the telecoms giant has received at least two bids, one from Apollo Global Management and the other from media banker Michael Klein working via a specially set up unit, Churchill Capital.
The reports have not been confirmed and the various reported parties are not commenting.
AT&T bought it in 2015 for $67 billion and followed that with Time Warner — now Warner Media — in 2018 for $108 billion. The deals brought strong criticism from Elliott Management, the activist investor that built up a $3.2 billion stake in AT&T.
Elliott saw that the deals diluted AT&T’s focus but it also wanted to use its influence in the search for a replacement for CEO Randall Stephenson. The investor sold its shares this year, weeks after former CTO John Stankey was named as Stephenson’s successor — though Stankey was seen as the executive behind the DirecTV and Warner acquisitions.
DirectTV, which delivers a digital direct-to-home (DTH) satellite service, is now losing customers to streaming companies, including AT&T’s own HBO Max and others delivered by broadband.
DirecTV charges from $64.99 a month for 160 channels, including 60 in high definition, up to $84.99 a month for 250 channels including regional sports networks.
The DirecTV acquisition made AT&T the largest pay TV provider in the US, with a customer base of approximately 26 million subscribers, though that number is believed to have fallen to around 19 million.
The 2015 deal also brought over 19 million customers in Latin America, including Mexico and the Caribbean.
The Latin American operations, which are not believed to be included in the proposed deals, are now branded as Vrio. The company is owned by AT&T Latin America. In September the Bloomberg news agency said that AT&T had failed to find a buyer for Vrio after a four-month attempt to sell it.