AT&T is reportedly ready to seal a deal with DirecTV worth around $50 billion. The purchase of DirectTV stock, at this price level, would be around $95 per share, or about 20 percent higher than its recent trading price.
The proposed buyout of DirecTV comes at a time when takeovers have become increasingly popular in the communications segment. Another television mega player, Comcast, is hoping to expand its business footprint through the purchase of Time Warner. If successful, it will eclipse the AT&T/DirecTV merger in total company size by a small margin.
DirecTV is working closely with Goldman Sachs Group to properly evaluate the AT&T offer. It may be determined that DirecTV is worth more than $95 per share and if so, there is a good chance AT&T will increase its bid. The former Ma Bell has already indicated it would pay up to $100 per share for DirecTV and possibly more.
Even if the deal is approved by shareholders, it will still be subjected to scrutiny by U.S. regulators. In light of the proposed deal between Comcast and Time Warner, it may prove difficult to convince anti- trust regulators that another merger or buyout is ultimately beneficial to the consumer.