AT&T is in talks with major private-equity firms to sell a minority share of their television provider, DirecTV. CNBC is reporting that there are a number of private-equity firms in talks to buy those minority shares. Apollo Management is one of the firms in talks to buy the shares. According to the report, the sale would also include AT&T Uverse and AT&T Now.
A valuation for DirecTV has not been determined but the report from CNBC claims that DirecTV is worth “less than $15 billion.” The New York Post reported that AT&T fielded “lowballs offers” of “well below $20 billion.” As part of the sale, AT&T would transfer the assets off their balance sheets.
According to the NY Post. DirecTV has been “hemorrhagin subscribers” and has been one of the main focus points for AT&T to unload.
“AT&T is trying to do something very hard,” MoffettNathanson analyst Craig Moffett said, “They have to manage a portfolio of declining businesses by slashing their costs, while still not hurting their cash generation prospects too badly, while simultaneously finding a way to sustain a dividend, pay down debt enough to placate rating agencies, and, all the while, invest in the few growth areas they’ve got that are worthy (wireless, HBO Max, and fiber-based broadband).”