AT&T making bid to acquire Time Warner

AT&T is in advanced discussions to acquire Time Warner, sources said on Friday, a deal that would give the telecom company control of cable channel HBO, the CNN news network, film studio Warner Bros and other media assets.

The merger would be one of the largest in recent years in the sector as telecom companies look to combine content and distribution capabilities to match consumer demand for tailored offerings and online delivery.

AT&T, which sells wireless phone and broadband services, has already made moves to turn itself into a media powerhouse, buying satellite TV provider DirecTV last year for $48.5 billion. Time Warner has a market value of about $70 billion and AT&T has a market value of about $230 billion.

Time Warner Chief Executive Jeff Bewkes rejected an $80 billion offer from Twenty-First Century Fox in 2014, but sources said on Friday that the former suitor had no plans to renew its bid.

An agreement between AT&T and Time Warner could be announced as early as on Monday, said the sources, who asked not to be named because the talks are confidential.

The Wall Street Journal had reported earlier on Friday that AT&T and Time Warner were engaged in advanced talks and a cash-and-stock deal could come as soon as this weekend.

Time Warner was not immediately available for comment. AT&T declined to comment.

Cowen and Co analyst Doug Creutz, who said AT&T would need to pay at least $100 a share in mostly cash to acquire Time Warner, questioned the strategy of buying content instead of licensing it.

'What does it get them that they can't get by licensing Time Warner content and at a much cheaper price than buying the whole company?” Creutz asked, noting it was unclear what savings could be gained 'from stapling distribution and content together. It's been tried. It never works.”