Exclusive: Acquisition of TPG in leadership by participation in AT&T’s DirecTV – sources

(Reuters) – Private equity firm TPG has entered into exclusive negotiations to acquire a minority stake in AT&T Inc’s satellite TV division, DirecTV, in a deal that would allow the United States wireless operator to reduce its net debt by around $ 150 billion, people familiar with the matter said on Friday.

It was not possible to know the exact price that TPG is willing to pay, but sources said the deal could value DirecTV at more than $ 15 billion. If the negotiations are successfully concluded, a deal could be announced in the coming weeks, added the sources, who requested anonymity because the matter is confidential.

AT&T and TPG declined to comment.

AT&T shares rose about 1% on the news to an intraday high of $ 29.05, giving the company a market capitalization of nearly $ 210 billion. Shares unofficially closed Friday at $ 28.92, up 0.3%.

The advanced negotiations with TPG are the culmination of an auction that AT&T held for DirecTV for several months. The deal would crystallize a financial blow to AT&T, which valued DirecTV at about $ 67 billion, including debt, when it agreed to acquire it in 2014.

Since then, DirecTV has been bleeding subscribers, with users switching to cheaper online streaming services like Netflix Inc and Prime.com from Amazon.com Inc.

AT&T said it lost 590,000 subscribers in the third quarter, covering the platforms DirecTV, U-verse and AT&T TV. It is under pressure to cut its growing debt stack as it invests more in 5G and other wireless services.

AT&T’s biggest deal, its $ 85 billion acquisition of media conglomerate Time Warner in 2018, soured in the wake of the COVID-19 pandemic, as a drop in cinema attendance weighs on its cinema revenue.

WarnerMedia, the segment that contains HBO and the company’s film and TV studio, generated revenue of $ 7.5 billion in the third quarter of 2020, compared to $ 8.4 billion in the same quarter last year.

Thanks to more people looking for home entertainment, however, AT&T reported 38 million subscribers in the United States to its premium TV channel HBO and HBO Max during the third quarter, reaching its goal for 2021 a year earlier.

TPG, which previously invested in companies in the sector, such as US regional cable operator Astound and Spanish-language broadcaster Univision, has about $ 85 billion in assets under management, according to its website.