This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Berkshire Lieutenants Poised For Role in DirecTV Takeover

NEW YORK (TheStreet) - John Malone signaled Dish Network (DISH - Get Report) should merge with DirecTV (DTV - Get Report) in 2013. Meanwhile, Berkshire Hathaway's (BRK.A) rising investing stars Ted Weschler and Todd Combs are speculated to be the brains behind the company's over $3 billion stake in DirecTV.

Now, those investors could be forced to either support or contest DirecTV's takeover. On Monday evening, the Wall Street Journal and Bloomberg reported AT&T (T - Get Report) will offer a deal for DirecTV, in a takeover deal that would value the company at around $48 billion at the high-end.

>>Read More: No, Carl Icahn and Warren Buffett Aren't Enemies

Such a move would effectively bolster AT&T's TV presence and help the company expand its wireless service as data usage and network demands continue to rise. Amid an ever-faster pace of consolidation in the telecom, broadband and wireless industry, DirecTV has emerged as one of the prized targets.

Unlike other consolidators in the wireless and telecom sector, DirecTV doesn't have many large hedge fund shareholders who are willing to pick battles with management or an acquirer. Instead, DirecTV has Berkshire as a 7.25% shareholder with a stake worth about $3.2 billion as of Monday's close.

For Berkshire, the deal may be a slightly unfamiliar role. Most of the company's biggest investments such as Wells Fargo (WFC), Coca-Cola (KO), IBM (IBM) and American Express (AXP) are simply beyond the reach of acquirers. The company, itself, also does a fair amount of M&A.

Malone, however, may take a more vocal role. He's had a much longer and active investment in DirecTV and once owned nearly 25% of the company's outstanding shares. As Bloomberg reported, Malone said just under a year ago, DirecTV should combine forces with Charlie Ergen.

"It would be good if DirecTV could combine with Echo or Dish or whatever Charlie calls it now just because scale economics in the media business drives down costs and makes it possible for larger investment," Malone told Bloomberg at the 2013 Allen & Co. conference in Sun Valley.

Now, it appears AT&T has the inside track. Let's see whether Dish will enter the fray.

Earlier in May, Dish's Ergen said he wouldn't be bullied by AT&T into a deal. If an offer does emerge, let's see if that remains the case or if Ergen strikes out once more for the large deal that may make use of the billions in wireless spectrum he's acquired.

In the meantime, expect Berkshire and Malone to have a say if DirecTV's takeover turns to a hostile effort or a horse race between Ergen and AT&T.

DirecTV shares rose over 6% to $92.50 in late Monday trading on reports of the AT&T deal.

Berkshire Hathaway and DirecTV have not yet responded to TheStreet's request for comment on this story. AT&T declined to comment.

>>Read More: Berkshire Hathaway Profits Drop But Buffett Beats S&P 500

-- Written by Antoine Gara in New York.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
DISH $75.04 0.00%
DTV $88.60 0.00%
T $34.56 0.00%
AAPL $128.46 0.00%
FB $78.97 0.00%

Markets

DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs