AT&T offloading DirecTV could be a “fire sale” as company weighs low bids
AT&T moves ahead on DirecTV sale despite low offers, seeks second round of bids. …
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AT&T is reportedly moving ahead with its plan to sell DirecTV despite receiving bids that value the satellite division at less than one-third of the price AT&T paid for it.
AT&T bought DirecTV for $49 billion in 2015 and has lost seven million TV subscribers in the last two years. In late August, news broke that AT&T is trying to sell DirecTV to private-equity investors and that a deal could come in at less than $20 billion.
The New York Post yesterday provided an update on the sale process, writing that AT&T is pressing ahead with an auction even though it is “shaping up to be a fire sale.” The sale process is being handled for AT&T by Goldman Sachs.
“Opening bids from a coterie of buyout firms came in at around 3.5 times DirecTV’s roughly $4.5 billion of EBITDA, implying a valuation at around $15.75 billion, according to a source close to the process,” the Post article said. Despite the low first-round bids, AT&T “last week invited a handful of suitors into the second round of an auction of the struggling satellite-TV broadcaster,” the Post wrote.
Private-equity firms “are looking to milk the shrinking company for cash as DirecTV’s subscribers steadily flee to lower-priced streaming-video services like Netflix,” the Post wrote. AT&T could retain a
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