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Monday, May 16, 2022

Is AT & T; Kicking the Tires on DirecTV?

AT & T; Inc. has been circling the satellite-television sector for several years, contemplating a bid for one of the two major players. Now, with consolidation in the telephone industry mostly done, AT & T; appears to be getting ready to swoop in, the Wall Street Journal reports.


AT & T; has been consulting lawyers in Washington about how long it would take to get government approval to purchase either EchoStar Communications Corp. or DirecTV Group Inc., people familiar with the matter said. If it does make a bid for one of the satellite providers, AT & T; could unveil the offer before year’s end in hopes of getting federal antitrust officials to approve the combination before a new administration takes over, these people say.


A final decision on a bid hasn’t been made. AT & T; hasn’t even decided which satellite-TV firm to go after, although a purchase of EchoStar, of Englewood, Colo., could be easier to undertake because it has a less-complicated ownership situation. There also isn’t any guarantee that either company would be available.


But what AT & T; shareholders and other investors are likely to focus on is the potential cost of a deal — between $30 billion and $40 billion, depending on the target — and the San Antonio telecommunications giant’s ability to absorb another acquisition after last year’s purchase of BellSouth Corp.


“It would create uncertainty,” said John Krause, a stock-research analyst at Thrivent Investment Management of Minneapolis, which owns 2.4 million shares of AT & T.; He doesn’t rate AT & T;’s shares.


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