WSJ: DTV/AT&T Could Happen in Two Weeks

I meant to get to this earlier, but late yesterday, the WSJ reported that AT&T (T) and DirecTV (DTV) are close to a deal that would value DTV at nearly $50 billion. The stock spiked to $91 per share in the after-hours market, though it’s come back down in today’s trading. It’s currently at $87 per share. According to the article, a deal could happen within two weeks. They also say that the deal would involve cash and stock. I’m assuming that any deal would value DTV somewhere in the mid-$90’s.

It’s easier for a company to pay for a company with stock rather than cash, so it’s like printing your own currency. There’s a drawback for higher-yielding stocks, which AT&T certainly is. More shares mean more dividend checks. AT&T currently yields 5%.

Posted by on May 13th, 2014 at 2:52 pm


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