There might be a bright future for DirecTV after all.
The broader stock market might not have had a thrilling Monday, but there was plenty of action and interest in AT&T (T 2.91%) shares. The telecom company was the subject of hot speculation in the satellite broadcasting world, and investors bid up its share price by nearly 3% on the scuttlebutt. This was more than sufficient to crush the S&P 500 index’s performance, as the indicator closed only marginally higher.
An old merger idea revived?
After market hours Friday, Bloomberg reported that AT&T and its business partner TPG are holding discussions on a merger of their DirecTV satellite unit with Dish, currently owned by EchoStar. Citing unnamed “people familiar with the matter,” the financial news agency added that the talks are currently in an early stage.
Bloomberg said that unnamed spokespeople from both DirecTV and Bloomberg declined comment. TPG and EchoStar representatives also turned down similar requests.
DirecTV and Dish are the two largest satellite TV providers in this country. A merger would create a business with roughly 20 million customers, according to Bloomberg.
This is not the first time a tie-up of the two satellite entities has been floated. In 2002, the pair attempted a merger, but the U.S. Justice Department quashed it on antitrust grounds.
It’s a streaming world these days
These are not salad days for the satellite TV industry, as it’s largely been overshadowed by streaming video. Subscription plans in the highly competitive streaming space can be very inexpensive compared to traditional pay TV offerings like satellite; presumably, a marriage of DirecTV and Dish would result in synergies that could bring down costs (and reduce those subscription rates).
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
