Does anyone want DirecTV?

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It seems there are very few bidders for AT&T’s pay-TV assets, which includes DirecTV.

Reports suggest that AT&T has allowed its deadline to slip into January to allow other potential bidders to enter the process, but it is also suggested that unless it receives better offers it might cancel the auction altogether.

As far back as December 9th the WSJ talked about bids coming in at more than $15 billion (including the debt being carried by DirecTV), but the New York Post is now saying that private equity giant TPG (Texas Pacific Group) has been invited to take a look at DirecTV’s books and make a bid.

Other reported bidders include Apollo Capital and Churchill Capital.

One recent research study suggested that DirecTV’s EBITDA will plunge from about $4.5 billion in 2020 to barely $3 billion by 2022.

It is also suggested that AT&T wants a near-50/50 deal, where AT&T will hold onto a majority shareholding but giving the winning bidder effective operating control over the pay-TV business. Evidently, tax mitigation matters favour this solution.

During Q3, DirecTV lost some 690,000 net subscribers and now has just 13.6 million subs on its books. This represents a y-o-y crash of 19 per cent.


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