AT&T's discussions to possibly buy DirecTV are progressing and a deal could happen within two weeks, according to a report in The Wall Street Journal.
Citing people familiar with the matter, the newspaper reported that AT&T would use a combination of cash and stock to acquire the satellite TV company. A takeover of the company would come at a premium cost of about $50 billion, the unnamed sources told the newspaper. DirecTV's market value was at nearly $45 billion Monday.
DirecTV would be run by current management as a unit of AT&T, Bloomberg reported, also citing unnamed sources. DirecTV Chief Executive Officer Mike White plans to retire after 2015, the sources said.
DirecTV and At&T declined to comment on the report. The move, if it should happen, would represent the latest sign of consolidation hitting the pay TV industry. The other most notable deal in the works is Comcast's attempt to buy Time Warner Cable for $45 billion, too.
AT&T and DirecTV expect it to take about a year for regulators to approve the deal, Bloomberg reported.
Regulatory-wise, the AT&T-DirecTV "stands a better chance than the Comcast-Time Warner Cable deal," said Jimmy Schaeffler, an industry analyst at The Carmel Group.
"But it's not as logical," he said. "You would be paying for two infrastructures and merging two different types of technologies. One is fiber optic cable and the other is digital satellite technology."
This deal doesn't make as much sense, Schaeffler said, as a DirecTV-Dish merger, unconfirmed reports of which surfaced two months ago. "It is a strange land in telecommunications right now," he said.
DirecTV shares rose nearly $2 Monday afternoon after The Wall Street Journal's update on the deal to close at $87.16. The stock rose higher to $92.80 in after-hours trading.
Based in El Segundo, Calif., DirecTV had $8.6 billion in revenue last year and provides satellite-TV service to about 20 million subscribers in the U.S. and 17 million in Latin America.
Dallas-based AT&T's U-Verse TV service, which uses fiber optic lines, gained 201,000 customers in the first quarter to reach 5.7 million. AT&T is the U.S.'s largest telecoms operator.