AT&T considering DirecTV sale, report says

19 Sep 2019

AT&T Inc is exploring the sale of its DirecTV satellite TV unit, the Wall Street Journal has reported, citing people familiar with the matter. The US telecoms giant completed its USD48.5 billion acquisition of DirecTV in July 2015 but has recently come under pressure from self-styled ‘activist investor’ Elliott Management Corporation, which has demanded an overhaul of AT&T’s strategy.

Earlier this month Elliott announced that it now manages funds that collectively beneficially own USD3.2 billion worth of shares in AT&T and published an open letter to the telco, outlining what it describes as ‘a compelling value-creation opportunity at AT&T’. Selling DirecTV – which it has suggested is a declining asset – represents one of Elliott’s key demands.

If a divestment comes to fruition, it will mean a sharp reversal of CEO Randall Stephenson’s strategic shift, which has also seen the telco pay USD85 billion for media and entertainment conglomerate Time Warner Inc. Mr Stephenson’s own position has come under scrutiny in recent weeks, with the Wall Street Journal suggesting that he could step down as early as next year.

United States, AT&T, DirecTV Group, Elliott Management