Everything You Need To Know About The AT&T – Time Warner Merger Chatter

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Everything You Need To Know About The AT&T - Time Warner Merger Chatter
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Everything You Need To Know About The AT&T – Time Warner Merger Chatter

Shares of Time Warner (NYSE: TWX) hit a new 52-week high of $94.44 on Friday after opening the day at $83.31.  The strong surge followed a series of reports that the company is being targeted by AT&T (NYSE: T) for an acquisition.

Here is everything you need to know.

Bloomberg was first to report of a potential transaction between the two companies towards the end of Thursday’s trading session.  The publication cited “people familiar with the matter” and reported that senior executives at both AT&T and Time Warner met in recent weeks to discuss several business strategies, one of which includes a potential merger.

The Bloomberg report further added that the talks were informal in nature and neither AT&T nor Time Warner tapped financial advisers and bankers for consultation.

Time Warner’s stock closed Thursday’s trading session at $82.99 after opening the day at $79.23.

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A separate Bloomberg report suggested that AT&T’s massive $120 billion debt load could stand in the way of acquiring Time Warner.  After all, AT&T’s debt rating is already rated the third-lowest investment-grade and the company just tapped the debt market not too long ago to acquire DirecTV in a deal that has yet to be finalized.

Moreover, AT&T’s attractive five percent dividend yield could be subject to change as part of a merger agreement.

Nevertheless reports continued coming in throughout the trading session which suggest that a deal is going to happen – and soon.

Time Warner’s stock was halted on a circuit breaker shortly before 11:00 AM EST as a Dow Jones report stated that AT&T is indeed in advanced talks to buy Time Warner and a deal could be announced as soon as this weekend.

Time Warner’s stock resumed trading shortly after 11:00 AM EST.

As if on cue, a new Bloomberg report added a new twist to the plot.  AT&T is pushing Time Warner to reach a deal by Monday as other bidders are also taking a look at acquiring the media empire.

The Bloomberg report continued that talks between AT&T and Time Warner intensified over a very short time period since initial reports surfaced just on Thursday.

AT&T is considered that Alphabet (NASDAQ: GOOG) and its Google unit or even Apple (NASDAQ: AAPL) could present themselves as bidders.

Finally, CNBC’s Andrew Ross Sorkin reported that a deal to acquire Time Warner will come at a price tag that is “way north of $90” per share.

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