AT&T is in negotiations with a view to buying DirecTV, a satellite TV provider, and may seal the possibly $50 billion deal in the next couple of weeks, two sources familiar with the story said on Monday.
The second-largest provider of wireless service has made an offer in the per-share range of low-to mid-$90s for DirecTV, one of the sources said. The DirecTV‘s stock closed at $87.16 on Monday.
On the basis of its shares outstanding, an offer close to $95 per share would put the value of DirecTV at above $48 billion. The valuation would indicate a premium of above 20% to its share price before reports of AT&T’s interest first appeared on May 1, according to Reuters.
Sources said that an agreement is yet to be reached and terms could change. They said discussions are on-going and sought anonymity for lack of authorization to disclose the developments to the public.
Finer details of the deal are yet to be worked out, including a break-up charge and the role current DirecTV boss could possibly play after the takeover, the second source said.
Another mega-deal was announced this year, bordering on Comcast’s offer to acquire Time Warner Cable for $45 billion.
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If the AT&T deal goes through, it would form a formidable challenge to an expanded Comcast, with the AT&T commanding nearly 28 million pay-TV subscribers and Comcast 30 million, according to The Washington Post.
The current talks are the latest indicator of a surging wave of possible mega-deals in the telecommunication, cable and satellite TV market.
Neither AT&T nor DirecTV have responded to inquiries on the matter.
Stocks of DirecTV soared 6% to $92.50 in prolonged trading on Monday.
Reuters reported earlier this week that DirecTV is consulting with Goldman Sachs Group to assess a potential merger after a recent acquisition bid from AT&T.
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To contact the reporter of this story; Yashu Gola at yashu@forexminute.com
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