AT&T CFO John Stephens voiced some hesitation about the timing for the closure of AT&T’s proposed $85 billion merger with Time Warner as the company endures a lengthy antitrust review from the Justice Department.
Stephens told the audience at a Wells Fargo investor conference that AT&T was now “uncertain” about when the deal would close, whereas previously the company had reiterated beliefs that the deal would be officially done before the year’s end.
AT&T’s new uncertainty around when the deal may close comes after last week reports suggested that the DOJ was preparing a lawsuit to block the deal in the case that it can’t reach terms with the companies. The Wall Street Journal reported that the DOJ’s decision could still go either way but that the agency and the companies were still not close to an agreement on deal conditions.
Wells Fargo analyst Jennifer Fritzsche said the lawsuit threat could just amount to a negotiating tactic on the part of the DOJ.
“While it is clear things remain very fluid, according to our D.C. sources, these headlines may be more about increasing the Department's leverage in negotiating conditions than a serious intent to try and sue to block the deal. We would note that nothing about the actual law or precedent for DOJ approving vertical mergers has changed. This is still a vertical merger and the DOJ would face the same uphill battle in court if it sued to stop it, same hurdles it faced a month or 6 months ago. Nothing has changed about the law or precedent since the new head of the Antitrust Division was confirmed,” wrote Fritzsche in a research note.
But the idea of a suit to block the merger has clearly raised concerns for Time Warner and specifically CNN, which is owned by the company. CNN anchor Brian Stelter recently used an interview with the White House’s Kellyanne Conway to ask if President Donald Trump had been involved with the DOJ’s review or potential lawsuit. Conway denied that the White House had influenced the DOJ at all.
“The Department of Justice and the different departments within the Department of Justice who look at merger deals will do their work. We’re not going to interfere with that here,” Conway said.
The argument between Stelter and Conway marked the latest in a recurring back and forth between Trump’s administration and CNN.