AT&T Inc. is moving quickly to seal a takeover deal with DirecTV, with an agreement between the two communications giants as little as two weeks away, people familiar with the matter said.
The two sides are discussing a deal that AT&T would pay for using a mix of cash and its stock, the people said. AT&T would likely pay a premium to DirecTV’s share price Monday, one of the people said.
DirecTV’s shares were changing hands for between $85 and $86 apiece in late trading, giving the company a market value of nearly $45 billion. With an additional premium, a takeover could value the satellite-TV provider in the neighborhood of $50 billion.
For AT&T, using stock to help pay for such a transaction has the benefit of limiting its borrowings and thus helping protect its credit rating. But the more stock it issues, the greater its dividend obligations, which is another consideration the company is grappling with, some of the people familiar with the matter said.
There is no guarantee the two sides will strike a deal, and if they do that they’ll be able to do so in the time frame envisioned. The companies have come close to striking a combination before, only to see it fall apart over issues including price, one of the people said.
This story was originally published on marketwatch.comÂ