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.
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.