Report: AT&T, Time Warner in Advanced Talks

What started  out as a platonic handshake may quickly morph into a marriage, as reports are surfacing that AT&T and Time Warner are in advanced merger talks, with a deal possibly coming as soon as this weekend.

The Wall Street Journal reported briefly early Friday that talks between the two companies were in advanced stages and that a deal could be announced soon. The Journal said the cash and stock deal also could be delayed. No other details were available.

The news of an impending marriage comes a day after Bloomberg reported that the two companies had conducted preliminary talks, mainly about ways they could jointly work together, and mentioned the possibility of a merger. Apparently, those discussions heated up considerably.

Time Warner stock, up as much as 10% Thursday when news of the talks first broke, went on another roller coaster ride Friday. Shares were up more than 10% ($8.69 each) to $91.68 per share in early trading Oct. 21.

Time Warner has been the target of much merger speculation ever since 21st Century Fox abandoned its unsolicited $80 billion offer for the company in 2014. AT&T has also reportedly been on the hunt for content to fuel its over-the-top endeavors, including DirecTV Now, which is scheduled to launch in the fourth quarter.

But a Time Warner deal would be pricey – in excess of $100 billion – and would come about a year after AT&T spent nearly $50 billion on its acquisition of DirecTV.

The talks would play into what some reports have said is growing sentiment that vertical integration, combining distribution and programming assets, is gaining favor with some providers. But while Comcast has had success with its purchase of NBC Universal, other distributors have spent the past five years uncoupling programming and distribution assets, including Time Warner, which spun off its Time Warner Cable unit in 2009.