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Tag: TPG Capital

  • AT&T and TPG Capital Complete DirecTV Spin-Off

    AT&T and TPG Capital Complete DirecTV Spin-Off

    AT&T and TPG Capital have completed their DirecTV deal, spinning off the brand from AT&T.

    After buying DirecTV in 2015 for $48.5 billion ($67.1 billion including debt), the service lost millions of subscribers in the ensuing years. As a result, AT&T decided to spin off the satellite TV company in a deal with TPG Capital.

    The new DirecTV company will own DIRECTV, AT&T TV and U-verse video services. HBO Max, owned by AT&T’s WarnerMedia, is not included in the deal.

    AT&T will retain 70% ownership of the new company, while TPG Capital will own the remaining 30%.

  • AT&T Will Spin Off DirecTV

    AT&T Will Spin Off DirecTV

    After months of exploring a potential sale of DirecTV, AT&T has decided to spin off the satellite TV service.

    AT&T bought DirecTV for $48.5 billion ($67.1 billion including debt), in 2015, but the service has since lost millions of customers. The satellite industry has experienced difficulties as a whole, threatened by the widespread adoption of streaming TV services. Even so, DirecTV’s losses have far outpaced its rival, Dish Network. As a result, AT&T has been looking to get rid of DirecTV for some time, exploring various options, including an outright sale.

    It appears the company has, instead, opted to spin off its satellite service with the help of TPG Capital. The deal is worth a mere $16.25 billion, including debt. AT&T will receive $7.8 billion in cash, including $5.8 billion from the new DirecTV and $1.8 billion from TPG. AT&T will use the cash to help pay down its debt.

    “This agreement aligns with our investment and operational focus on connectivity and content, and the strategic businesses that are key to growing our customer relationships across 5G wireless, fiber and HBO Max. And it supports our deliberate capital allocation commitment to invest in growth areas, sustain the dividend at current levels, focus on debt reduction and restructure or monetize non-core assets,” said AT&T CEO John Stankey. “As the pay-TV industry continues to evolve, forming a new entity with TPG to operate the U.S. video business separately provides the flexibility and dedicated management focus needed to continue meeting the needs of a high-quality customer base and managing the business for profitability. TPG is the right partner for this transaction and creating a new entity is the right way to structure and manage the video business for optimum value creation.”

    AT&T will own 70% of the common equity of the new company, with TPG owning the remaining 30%.

    “We certainly didn’t expect this outcome when we closed the DirecTV acquisition in 2015,” AT&T CEO John Stankey said on a conference call, according to CNBC, although he expressed his belief the deal represents the best option for AT&T shareholders.

  • Report: Dell Participating In Buyout Talks

    Report: Dell Participating In Buyout Talks

    Dell may be looking to go private, as the company has been participating in buyout talks with Silver Lake Partners, according to a report from the Wall Street Journal.

    The publication, citing a person familiar with the matter, reports that discussions took place on Tuesday for “a leveraged buyout at around $13 to $14 a share,” and that the buyout group would include Silver Lake in addition to at least one other investor “such as a pension or sovereign wealth fund, and Mr. Dell.”

    The source reportedly also said that the group would need to arrange $2 billion in equity, and Michael Dell would “likely put his stock toward the deal” (worth at least $3.6 billion). “The group would also use some cash on Dell’s balance sheet, while taking on new debt of about $15 billion, to meet an equity purchase price of roughly $22 billion to $25 billion,” says the report. “The person said advisers are trying to bring the negotiations to a close quickly, either way.”

    According to Fortune, TPG Capital was also in talks with Dell, but has walked away from the talks (but was working independently). That report cites multiple sources.

    Dell shares are trading at $12.58 (-0.59‎, -4.47%‎) at the time of this writing.