AT&T Unlikely To See Competition In Its Bid For Time Warner

Jim Swanson

Mon, Oct 24, 2016, 8:42 AM

AT&T Inc. (NYSE: T) has proposed an acquisition of Time Warner Inc (NYSE: TWX) for $107.50 per share

Wunderlich’s Matthew Harrigan mentioned that the bid was in-line with expectations of Time Warner’s 2017 public market upside, implying that “unless the deal is disruptive to TWX's creative culture, it is at least a "push" for Ma Bell.”

AT&T’s management believe the deal would be manageable in the context of the company’s capital structure and dividends, which also implies that the market is undervaluing the free cash flow generation and potential long-term growth, which is likely to at least be in line with the overall S&P 500.

Regulatory Risk

Harrigan believes that “large mergers, especially involving media content and distribution, have heavily politicized approval processes.”

The analyst expressed skepticism regarding D.C.'s posture on the Comcast Corporation (NASDAQ: CMCSA) and Time Warner Cable Inc (NYSE: TWC) merger, saying that “Ma Bell has even more formidable national video and mobile distribution – especially with the advent of 5G and interim "4.5G."”

Accretion From The Deal

Harrigan believes AT&T is well positioned for 4K with the favorable topology of DIRECTV (NASDAQ: DTV) and its wireless capabilities, which are likely to drive innovation in short-form programming, integrated with social media.

The analyst believes the merger of Time Warner with AT&T would lead to “modest” synergies of $1 billion, and become “moderately accretive” to the adjusted EPS and free cash flow per share within a year post closing.

Harrigan maintained a Buy rating on Time Warner, with a price target of $106

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for TWX

Oct 2016	Evercore ISI Group	Downgrades	Buy	Neutral
Oct 2016	Atlantic Equities	Downgrades	Overweight	Neutral
Oct 2016	Moffett Nathanson	Downgrades	Buy	Neutral

View More Analyst Ratings for TWX
View the Latest Analyst Ratings

See more from Benzinga

iPhone 7 Plus Plus: BTIG Raises Apple's Price Target From 4 To 3

'Which Bucket Do I Draw From First?' Suze Orman Explains To 67-Year-Old The Best Order For Tapping Into Her Retirement Accounts
When Ellen, a 67-year-old retiree, reached out to Suze Orman during her podcast, she had a straightforward yet crucial financial inquiry: "Which bucket do I draw from first?" Ellen, whose Social Security covers most of her daily living expenses, needed guidance on how to use her different types of retirement accounts for additional expenditures like travel. Don't Miss: The recommended retirement savings amount is $550K, but here is why so many Americans are falling short. Reddit user reveals his
Benzinga
A Once-in-a-Decade Opportunity: 3 Magnificent Dividend Stocks Down Between 19% and 28% to Buy Now and Hold Forever
These three low-volatility, dividend-growth stocks offer the potential to rebound while trading near decade-low valuations.
Motley Fool
Can You Guess How Many Retire With A $5 Million Nest Egg?
In the realm of retirement savings, only a select few in the United States achieve the milestone of a $5 million nest egg. Data from the Employee Benefit Research Institute, based on the Federal Reserve’s Survey of Consumer Finances, reveals that a mere 0.1% of retirees manage to accumulate over $5 million in their retirement accounts, whereas only 3.2% amass over $1 million. Don't Miss: 82% of Americans aren’t using this government secured 5% passive income stream, are you one of them? Can you
Benzinga
1 Ridiculously Undervalued Growth Stock Down 93% to Buy Hand Over Fist Right Now in May
Investors are not convinced that this cheap stock is safe from the rising effectiveness of artificial intelligence.
Motley Fool
Analysts overhaul Nvidia stock price targets ahead of earnings
The chipmaker's new GB200 platform could transform its medium-term revenue growth, according to Wall Street analysts.
TheStreet
The stock market is about to see a 10% correction, with further disinflation a 'pipe dream' and Fed rate cuts coming much later, Stifel says
Inflation falling further from here in the near term is a "pipe dream" and rate cuts will continue to be pushed out, Stifel strategists said.
Business Insider
Southern States Sink As Seriously Underwater Home Mortgages Rise
According to a report released on May 9, 2024, the number of properties classified as seriously underwater is ticking up, with southern states bearing the brunt of the phenomenon. One in 37 homes with mortgages was considered seriously underwater during the first quarter, according to real estate data provider ATTOM's 2024 U.S. Home Equity & Underwater Report. That's up from one in 38 homes during the fourth quarter of last year. A mortgage is considered seriously underwater when the estimated l
Benzinga
Wall Street Desks Warn CPI Report May Upset Stock-Market Calm
(Bloomberg) -- From JPMorgan Chase & Co. to Citigroup Inc., Wall Street’s most prominent trading desks are warning that investors should gear up for a potential break in the calm that’s come over the market.Most Read from BloombergTrump Vows ‘Day One’ Executive Order Targeting Offshore WindGameStop Shares Soar as ‘Roaring Kitty’ Revitalizes Retail FrenzyTesla Rehires Some Supercharger Workers Weeks After Musk’s CutsChina to Start $138 Billion Bond Sale on Friday to Boost EconomyMacron Puts Frenc
Bloomberg
Forget Starbucks: Buy This Other Sizzling-Hot Coffee Chain Stock Instead
Starbucks is facing a number of challenges right now, and consumers may be opting for an up-and-coming chain as an alternative.
Motley Fool
Tesla rehires some Supercharger workers weeks Musk cut them
Tesla has begun hiring back some of the almost 500 members of its Supercharging team that Chief Executive Officer Elon Musk dismissed late last month.
Autoblog

News

Life

Entertainment

Finance

Sports

New on Yahoo

Yahoo Finance

AT&T Unlikely To See Competition In Its Bid For Time Warner

Recommended Stories

'Which Bucket Do I Draw From First?' Suze Orman Explains To 67-Year-Old The Best Order For Tapping Into Her Retirement Accounts

A Once-in-a-Decade Opportunity: 3 Magnificent Dividend Stocks Down Between 19% and 28% to Buy Now and Hold Forever

Can You Guess How Many Retire With A $5 Million Nest Egg?

1 Ridiculously Undervalued Growth Stock Down 93% to Buy Hand Over Fist Right Now in May

Analysts overhaul Nvidia stock price targets ahead of earnings

The stock market is about to see a 10% correction, with further disinflation a 'pipe dream' and Fed rate cuts coming much later, Stifel says

Southern States Sink As Seriously Underwater Home Mortgages Rise

Wall Street Desks Warn CPI Report May Upset Stock-Market Calm

Forget Starbucks: Buy This Other Sizzling-Hot Coffee Chain Stock Instead

Tesla rehires some Supercharger workers weeks Musk cut them