AT&T-Time Warner mega-deal is near

Oct 23, 2016, 00:39
AT&T-Time Warner mega-deal is near

Following up an earlier Bloomberg story, the Wall Street Journal reports that telecom titan AT&T is in advanced talks with media giant Time Warner in a deal that would reshape the TV landscape.

Time Warner will be valued between $105 and $110 a share, with the deal expected to be announced as soon as Saturday night, the Wall Street Journal reported.

Time Warner's shares jumped by 8 percent in trading on Friday whilst it also gained 3.4 percent in after hours trading totalling the groups market value to $73 billion whilst AT&T finished at $37.49, 3 percent lower.

A year ago, AT&T shocked Wall Street by paying $48.5 billion to buy satellite TV provider DirecTV, giving it an instant access to almost all domestic markets for selling its pay-TV service and Internet-TV bundles.

Previously Jeff Bewkes turned down an offer of $80 billion from Twenty-First Century Fox Inc in 2014.

It looks like American telecommunications company AT&T might be set to buy Time Warner in what might turn out to be a $70 billion deal. Time Warner, the company that owns HBO, CNN, Cartoon Network, all of Warner Bros., and a whole bunch of other media brands you know.

Bloomberg on Thursday said senior executives at AT&T and Time Warner met in recent weeks to discuss a possible merger, but it said the talks were informal at that stage.

Make it your business. Time Warner Cable, the spun-off business, was acquired by Charter Communications previous year for $56 billion.

But any AT&T-Time Warner deal would be subject to a lengthy regulatory review process.

Time Warner was the center of the attraction.

That logic is driving AT&T's effort to buy Time Warner as two storied companies respond to changes reshaping the entertainment industry. (NYSE:T) is in advance talks to buy Time Warner. Despite this, the market value of AT&T is worth $230 billion.

AT&T and Time Warner did not respond to requests for comment. Time Warner spun off AOL in 2009, and the latter was then acquired past year by wireless company Verizon in another merger of media and telecommunications. The company also owns a 10 percent stake in video streaming site Hulu.

With HBO and CNN on one side of the company, and wireless on the other side, AT&T would have more power to shape the future of media.

The company has $120 billion in debt, while New York-based Time Warner had long-term obligations of more than $24 billion.

The pay-TV distributors have been combining as well, building negotiating leverage to rein in the price increases that media companies seek for their TV networks.

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