Private equity firm Apollo Global Management has approached AT&T to propose a way the telecom giant could combine its DirecTV satellite TV arm with rival Dish Network in a new company that would still be controlled by AT&T, according to Fox Business.
Under Apollo’s proposal, the private equity firm would provide financing and hold a minority equity stake in the new company.
What I’ve heard is that Apollo made this pitch nine months ago and it isn’t going anywhere. AT&T wasn’t interested because its top management sees DirecTV as integral to its strategy of owning distribution and content, according to a person familiar with the situation. And such a deal would likely face regulatory scrutiny—something AT&T can do without, having spent two years fighting the Department of Justice to acquire Time Warner.
Now, though, with activist investor Elliott calling for change at AT&T, bankers are sure to be making new pitches to the telecom giant about DirecTV. But so far it seems the company is holding on to the business.