AT&T is said to be disappointed with the level of bidding for DirecTV, and it may take its struggling satellite TV operation off the selling block if it can’t figure out a way to drive up the price.
The New York Post reported the latest salvo of DirecTV sale news, culled from the usual anonymous sourcing. AT&T, it said, has pushed final bidding for DirecTV into January, and it has asked TPG Capital to look at the books in hopes that the private equity firm might drive up the bidding price.
On Dec. 9, The Wall Street Journal reported that Churchill Capital Corp. entered a bid that narrowly exceeded $15 billion. But other private equity groups, notably Apollo Management, came in at under the $15 billion threshold.
According to the New York Post, the private equity bidders are surprised that AT&T would even throw the notion of walking away out there.
AT&T paid $49 billion, including debt valued at around $17 billion for DirecTV back in 2015. However, DirecTV finished the third quarter with just 13.6 million remaining subscribers after shedding another 690,000.
“Given [AT&T’s] lack of options and DirecTV's woes though, an offer in the $15 billion to $20 billion range plus some of AT&T's $153 billion debt load would be an acceptable exit of the business,” wrote Bloomberg Intelligence's John Butler in August. “That’s especially true considering AT&T reportedly wants to maintain a majority of DirecTV, and only remove the property from its balance sheet and transfer management of the business to the buyer."
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