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News > Deals
AT&T 'near TWE sale'
December 14, 2000: 4:09 a.m. ET

Report: U.S. phone titan nears plan to sell 25% of Time Warner Entertainment
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LONDON (CNNfn) - AT&T Corp. is expected to announce Friday it wants to sell its 25 percent stake in movie, programming and cable company Time Warner Entertainment, a shareholding worth about $10 billion, the Financial Times reported Thursday.

As part of an accord with U.S. regulators, the No.1  U.S. long-distance phone and cable group faces a Dec. 15 deadline to choose to sell one of three sets of assets. One option is selling the stake in Time Warner Entertainment, in which AT&T is a minority partner of 75 percent shareholder Time Warner Inc., the parent of CNN.

The other options outlined in the agreement with the U.S. Federal graphicCommunications Commission are for AT&T to shed Liberty Media, its television programming arm, or sell cable television systems with around 10 million subscribers, bringing it within federal limits.

The FCC imposed conditions on the former "Ma Bell" after it agreed to purchase cable company Media One. A sale would come at a propitious time for AT&T, which is now saddled with more than $60 billion in debt after its recent spree of cable purchases.

AT&T said last month it planned to fully spin off Liberty Media, which already trades as a tracking stock of the parent. But uncertainty about whether AT&T can carry out that spin-off tax-free has nudged the company toward selling Time Warner Entertainment.

A ruling on whether the Liberty Media spin-off will be tax-free isn't expected until next spring. However, it could take months for AT&T to come to terms with a possible buyer for the Time Warner Entertainment stake, the FT said.

The paper said AT&T has encountered disagreements with Time Warner about what price the media company might pay to buy back the stake in Time Warner Entertainment. Time Warner is said to feel no pressure to buy back AT&T's stake.

AT&T Chairman and Chief Executive Officer C. Michael Armstrong last month said the telecom company was considering the sale of non-core assets, such as the Time Warner Entertainment stake, as a way to pay down debt.

Shares of AT&T (T: Research, Estimates), which have fallen along with many other telecom stocks recently, dropped 75 cents to close at $22.31 Wednesday on the New York Stock Exchange. graphic

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.