Analyst: Carey Departure = DirecTV Sale
Eagan Says AT&T Likely Suitor
Mike Farrell -- Multichannel News, 6/1/2009 3:17:45 PM EDT
The speculation surrounding DirecTV CEO Chase Carey's possible departure for News Corp. could be the first step toward an outright sale of the satellite giant, most likely to AT&T, Collins Stewart cable and satellite analyst Tom Eagan said in a research report Monday.
Several reports Monday said that Carey is negotiating to return to News Corp., the media giant where he spent most of his career before joining DirecTV in 2003."Mr. Carey has fulfilled the most pressing corporate DirecTV imperatives: turn-around DirecTV; negotiate the [Liberty Entertainment] merger; and renew the NFL agreement," Eagan wrote. "The heavy lifting is done."
In May Liberty proposed a deal that would house its 54% interest in DirecTV, its interests in three regional sports networks and other assets in Liberty Entertainment. Liberty Entertainment would later be merged into DirecTV.
That deal is expected to close in the fourth quarter, and would simplify DirecTV's ownership, which would also facilitate a sale, Eagan speculated. Eagan added that he believes AT&T is a prime candidate for DirecTV because it is vulnerable to increased competition with cable operators after their planned rollout of DOCSIS 3.0 in 2010 and the expansion of HD channels.
Investors appeared to be cheered by the possibility of a deal. DirecTV shares were up 50 cents each (2.2%) to $23 per share while News Corp. shares rose 68 cents each (6.1%) to $11.91 per share in afternoon trading Monday.
Talkback
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I sure hope DirecTV even if for sale, isn't purchased by AT&T. As a long time customer of...
Scot George - 6/2/2009 7:37:48 AM EDT
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