AT&T files confidentially for IPO of DirecTV Latin America stake

AT&T, which owns satellite television service DirecTV, on Wednesday said This specific had filed confidentially for an initial public offering for its minority interest in DirecTV Latin America.

Shares of AT&T rose nearly 2 percent to $37.45 in morning trade.

The No. 2 U.S. wireless carrier has been reviewing its portfolio to find ways to help reduce its debt, which will increase to about $180 billion once its $85.4 billion acquisition of Time Warner closes.

The IPO, required to come inside first half of 2018, will be unlikely to affect AT&T’s debt profile meaningfully, fresh Street Research analyst Jonathan Chaplin said.

“This specific will be a very very little step inside right direction …This specific probably won’t move the needle very much,” Chaplin said.

Reuters, citing sources, reported last year that will AT&T was evaluating a sale of its pay TV operations in Latin America. The assets could have been valued at more than $8 billion at the time.

“We expected that will AT&T could sell This specific (DirecTV Latin America stake) rather than publicly list This specific, This specific could presumably mean they weren’t able to find a buyer,” MoffettNathanson analyst
Craig Moffett said, raising concerns over the valuation of the assets.

Cable service providers have been facing stiff challenges as the industry battles with cord-cutting, where people are moving towards on-demand video streaming services such as Netflix
in addition to Amazon.com’s Amazon Prime.

The Latin America business, excluding Mexico, has been AT&T’s best candidate to divest, as the region will be largely non-strategic in addition to “didn’t fit very well with any of their additional significant initiatives,” Moffett said.

AT&T, which acquired DirecTV for $48.5 billion in 2015, reported about 13.6 million video connections for Latin America as of Dec. 31, 2017, an addition of 1.1 million by a year earlier.

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