AT&T Looks to Close Time Warner Deal by Monday to Beat Rivals, Observers Say

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AT&T is pushing to clinch a deal to buy Time Warner by Monday, aiming to close the door on other potential bidders, according to a person familiar with the matter.

Talks between the companies have accelerated since it was first reported Thursday that executives had met in recent weeks to discuss potential business combinations, said the person, who asked not to be identified discussing private discussions. Part of AT&T's concern is that other suitors such as Google or Apple could jump in, the person said.

Shares of Time Warner, the owner of CNN, HBO and the Warner Bros. studio, surged in trading Friday, advancing as much as 14% to $94.44. That gives the company a market value in excess of $70 billion and pushes the stock beyond the $85-a-share Rupert Murdoch's 21st Century Fox unsuccessfully offered in 2014. AT&T, the largest U.S. pay-TV company through its ownership of DirecTV, fell as much as 4.4%.

Apple is unlikely to bid for Time Warner, according to a person with knowledge of the matter. Apple's services and content chief Eddy Cue brought up the idea of a possible deal with Time Warner's corporate strategy head Olaf Olafsson late last year and said in a podium discussion on Thursday that he was a huge fan of the company's Home Box Office.

Google didn't immediately respond to a request for comment. AT&T and Time Warner declined to comment.

A deal for Time Warner would have to begin at a "bare minimum" of $100 a share, Alan Gould, an analyst at Brean Capital, said in a note Friday. His private market value for the company is $123.

"We have always believed that the combination of content and distribution makes sense," Mr. Gould said in the note. Time Warner "has been the greatest content factory for films and TV. Given the rapidly evolving distribution universe, we believe content ownership could be beneficial."

Time Warner Chief Executive Officer Jeff Bewkes is a willing seller if he gets an offer he thinks is fair, said one of the people. AT&T has transformed itself over the past decade from a regional phone company to a national telecommunications powerhouse. Its plan to focus on media and entertainment targets include companies worth $2 billion to $50 billion, people familiar with the plans said earlier this month.

~~ Bloomberg News

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