UPDATE 2-AT&T to buy DirecTV for $48.5 bln as cellular growth eases

domingo 18 de mayo de 2014 19:24 GYT

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By Liana B. Baker, Soyoung Kim and Marina Lopes

May 18 (Reuters) - AT&T plans to pay $48.5 billion to buy DirecTV, the top U.S. satellite TV operator, in a bid for growth beyond an increasingly competitive cellular market.

The deal, announced on Sunday, comes as Comcast Corp awaits regulatory approval of its $45 billion bid for Time Warner Cable Inc, a transaction that has the potential to transform the television landscape by creating a new cable and broadband Internet powerhouse.

AT&T said it is offering $95 per DirecTV share in a combination of stock and cash, a 10 percent premium over Friday's closing price of $86.18. The cash portion, $28.50 per share, will be financed by cash, asset sales, financing already lined up and other "opportunistic debt market transactions."

Analysts said the deal would help support AT&T's dividend even as it confronts tougher competition from upstart T-Mobile USA and other cellular operators that have pressured its average revenue per user.

"This is financial engineering," said Kevin Smithen, an analyst at Macquarie. "It is a transaction that secures the dividend for many years, taking advantage of AT&T's relatively high valuation and low interest rates to do an accredited acquisition that will bolster its free cash flow."

To facilitate regulatory approval, AT&T will sell its roughly 8 percent stake in Carlos Slim's America Movil . DirecTV has some 18 million customers throughout Latin America, in addition to its 20 million U.S. subscribers.

AT&T said it expects the takeover to deliver cost savings at an annual rate of $1.6 billion by the third year after closing.   Continuación...