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AT&T Close to Selling DirecTV Minority Stake to TPG: Report

DirecTV
(Image credit: DirecTV)

AT&T has entered into exclusive negotiations to sell a minority stake in DirecTV to private equity company TPG, Reuters reported

The deal “could” value DirecTV at more than $15 billion, the report said. An agreement could be announced in the “coming weeks,” added Reuters, noting that AT&T is anxious to find ways of paying down nearly $150 billion in debut. 

Reuters cited “people familiar with the matter.”

Both AT&T and TPG have declined comment.

Also Read: AT&T Disappointed with DirecTV Bids, May Cancel Auction (Report)

The New York Post reported in early December that AT&T was disappointed in a number of private equity bids for its satellite TV company, some slightly above $15 billion, some below that figure.

There has been speculation that AT&T would enter into an agreement with financier Michael Klein’s Churchill Capital to spin DirecTV off through a special purpose acquisition company. 

The Post reported that AT&T had also asked TPG to "look at the books" in hopes of driving up DirecTV's selling price. 

AT&T paid $49 billion for DirecTV in 2015, a figure that swelled to $66 billion once acquired debt was factored in. Since then, DirecTV has lost more than 40% of its customers, finishing the third quarter with just 13.6 million subscribers. 

And AT&T has taken on a lot more debt, subsequently paying another $85 billion to buy Time Warner Inc. in 2018.

It’s unclear as to how much debt relief a TPG deal valuing DirecTV at around $15 billion would provide. It’s also unclear as to whether TPG would gain stakes in other AT&T pay TV assets, notably the declining U-verse platform. There had been speculation that AT&T might include that asset in a private equity arrangement for DirecTV. 

AT&T sold its Crunchyroll streaming service to Sony in December for $1.175 billion. 

Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!