The relationship between AT&T (NYSE: T) and DirecTV (NASDAQ: DTV) is apparently getting cozier as the two dance around the possibility of AT&T acquiring the nation's leading satellite provider.
DirecTV is reportedly working with Goldman Sachs Group to explore a sale to AT&T, sources close to the matter told Bloomberg. Initial reports said the sale would be for about $40 billion--or $5.2 billion less than Comcast's (NASDAQ: CMCSA) current bid for Time Warner Cable (NYSE: TWC)--but the Bloomberg story valued DirecTV at $45 billion.
Of course all the involved parties--DirecTV, AT&T and Goldman Sachs--declined to comment.
Right now everything is speculation. Some analysts have suggested that AT&T doesn't need DirecTV and that DirecTV needs AT&T's broadband pipeline. And, to confuse matters even further, Dish Network (NASDAQ: DISH) Chairman Charlie Ergen reportedly contacted his counterparts at DirecTV about reviving a merger between the nation's top two satellite providers. A previous effort was shot down by federal regulators more than a decade ago, but that was before Comcast took aim at Time Warner Cable.
This isn't the first time DirecTV and AT&T have danced. The companies have, at least in the minds of analysts, been potential partners for years. Today's conversation is made more relevant by a changing telecommunications space where DirecTV needs the broadband and wireless assets AT&T would bring to its business to compete with cable and telco plays such as Verizon (NYSE: VZ) FiOS and, on a lesser scale, CenturyLink (NYSE: CTL) Prism TV. AT&T, while not in as dire need, has the money available and the hankering to add DirecTV's 20 million or so video subscribers to its U-verse stable.
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