How to Read an AT&T and DirecTV Merger

NEW YORK (TheStreet) -- We don't yet know whether AT&T (T) will formally take the plunge and bid on DirecTV (DTV), but sources familiar with the situation said a deal could be announced in the next few weeks and at a price for DirecTV in the low-to-mid $90s a share, or a valuation of about $48 billion.

>> Read More: Berkshire Lieutenants Could Play Role In DirecTV Takeover

All of this, of course, comes with the caveat that much of the prospective deal, including the future of DirecTV Chairman and CEO Michael White, may remain undecided in spite of some media reports to the contrary.


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If a deal is announced there are major ramifications for AT&T, one of the most widely owned stocks in the Dow Jones Industrial Average. AT&T's quarterly dividend of 46 cents a share may be an important place to start for investors who are looking for an early read on the transaction.

DirecTV, while it may help AT&T increase the scale of its video offerings and diversify the company's footprint to Latin America, could be an important way for AT&T to maintain and increase its dividend in coming years.

In that sense, a potential combination may have more in common with Verizon's  (VZ$130 billion acquisition of a remaining interest in Verizon Wireless, than other consolidation running through the cable, satellite, and telecom landscape such as Comcast's (CMCSA) proposed merger with Time Warner Cable (TWC).

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