AT&T will reportedly initiate its own investigation into whether the White House influenced the Justice Department’s review of its proposed $85 billion merger with Time Warner.
According to Bloomberg, AT&T and Time Warner are preparing to ask the court for access to communications between the White House and DOJ regarding the transaction. The latest development in the contentious review comes after more than a week after reports suggested that the DOJ was gearing up for a possible lawsuit to block the merger.
Given the rocky relationship between President Donald Trump and CNN, which is owned by Time Warner, suspicions has arisen about Trump potentially intervening with the DOJ review. For his part, Trump denied making any decisions on behalf of the DOJ but did indicate he believed the review could end up in court.
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CNN and its parent Turner Broadcasting have been at the center of the DOJ’s and AT&T’s disagreements about conditions for approving the merger. According to Bloomberg, the DOJ has reportedly told AT&T to find a way to make the deal beneficial for it without being able to own CNN, TBS and other Turner networks. One scenario discussed would involve AT&T selling off Turner and then operating the spun-out company as a joint venture.
AT&T CEO Randall Stephenson, in response to reports that he initially suggested a sale of CNN to appease regulators, unequivocally denied AT&T would part ways with the news network.
“Until now, we’ve never commented on our discussions with the DOJ. But given DOJ’s statement this afternoon, it’s important to set the record straight. Throughout this process, I have never offered to sell CNN and have no intention of doing so,” said Stephenson in a statement.
Paul Gallant, an analyst with Cowen Research, said that AT&T is likely to win a court challenge and that public questioning of Trump’s motives could help the case.
"We think AT&T's merger approval chances would be further improved if there's meaningful criticism in the coming days of Trump possibly using antitrust law to target CNN, and either the president or DOJ decide a court challenge isn't worth it, especially with DOJ likely to lose the court case," Gallant wrote.