Exclusive: Buyout firm TPG is at stake in AT & T’s DirecTV sources

(Reuters) – Private equity firm TPG has entered into exclusive talks to acquire a minority stake in AT & T Inc’s satellite TV division, DirecTV, in a deal that would allow US wireless carrier to pay its net debt of nearly $ 150 billion, people are familiar with the case that was said Friday.

The exact price TPG is willing to pay could not be determined, but sources said DirecTV could value more than $ 15 billion. If the negotiations are successfully concluded, an agreement could be announced in the coming weeks, the sources added, requesting anonymity because the matter is confidential.

AT&T and TPG declined to comment.

Shares of AT&T rose about 1% to an intraday high of $ 29.05, giving the company a market capitalization of nearly $ 210 billion. The stock officially closed at $ 28.92 on Friday, up 0.3%.

The advanced talks with TPG are the culmination of an auction that AT&T hosted for DirecTV for several months. The deal would be a financial hit for AT&T, which valued DirecTV at about $ 67 billion, including debt, when it agreed to acquire it in 2014.

Since then, DirecTV has had a thriving subscriber base, and users are moving to cheaper online streaming services like Netflix Inc and Amazon.com Inc’s Prime service.

AT&T said it lost 590,000 subscribers to the DirecTV, U-verse and AT&T TV platforms in the third quarter. It is under pressure to sharpen its swelling debt as it invests more in 5G and other wireless services.

AT & T’s biggest deal, the acquisition of media conglomerate Time Warner in $ 85 billion in 2018, weakened in the wake of the COVID-19 pandemic, as a dip in attendance at movie theaters outweighed movie revenues.

WarnerMedia, the segment that includes HBO and the company’s film and TV studio, generated revenue of $ 7.5 billion in the third quarter of 2020, compared to $ 8.4 billion in the previous quarter.

However, thanks to more people looking for entertainment at home, AT&T reported 38 million subscribers in the United States for both its premium TV channel HBO and HBO Max during the third quarter, which reached its 2021 target a year early.

TPG, which has previously invested in companies in the sector, such as US cable TV operator Astound and Spanish broadcaster Univision, has about $ 85 billion in assets under management, according to its website.